Real estate attracts hundreds of new entrepreneurs every year, each with the hope of making it big but the practitioners say only those with passion for the profession do well in it, writes MAUREEN AZUH
One of the most common business ventures in the world today is real estate agency. Every other year, the sector records a high number of new entrants.
From those who are into it on full-time basis to others who choose it as an additional source of income, real estate has taken a new dimension, with people leaving their white collar jobs for the business. But how profitable is real estate business?
Many, who venture into the business, do so with the mindset of making big profit in a sector they started with almost zero capital. However, according to some real estate agents, it takes passion to survive in the business.
Real estate professional and member of the Nigerian Institution of Estate Surveyors and Valuers, Femi Moore, says he is into real estate agency because he has passion for marketing, which involves meeting and interacting with people. He combines both residential and commercial real estate, and has been in the business for 10 years.
“Real estate is a lucrative job but it depends on passion,” he says. Some people can find it difficult if they don’t have passion for it. For instance someone can inspect a property and end up not paying for it. An agent can take someone to inspect several properties in a day and the client would still not pay for any. So for someone who is not driven by passion, he may be discouraged.”
He says real estate agency is such that in a month, an agent may end up not making anything and in a day he can make millions. He says it does not matter what aspect of real estate agency an agent is involved with, whether residential or commercial, the terms are the same.
“I can’t really say how much a person can make in a year. I can’t place a value on it but one can be comfortable or earn more than one’s counterparts in the banking industry. In a year one can make millions and in another may not make anything at all, so this business thrives on passion really,” he says.
Echoing Moore’s thought, a non-professional agent in New Oko-Oba area of Lagos, who prefers to be identified simply as Ariyo, says anyone who goes into real estate agency with plans of making big money within a short period may be in for a surprise.
“Real estate is not like the regular buying and selling we see by the road sides, it must be something you really want to do and you must be a patient businessman. Some may be lucky and make their money early while others might have to wait for a breakthrough for several years,” he says.
Gbenga Ojo, a ‘roaming’ agent in Abule-Egba says he is into real estate not because he is very passionate about the business but because he has to survive.
“That is why I don’t waste my time with unserious clients, if you need a house or property, you should have some money ready. When I notice that a client does not have money for what he wants, I don’t waste my time walking in the sun with him,” he says.
The agents say on the average they make about 10 per cent of the total sum of each transaction they are able to conclude especially for those who are strictly into residential real estate while in commercial real estate, where properties worth millions of naira are sold, the commission is negotiable. They agree that the business can bring huge turnover for any businessman who is passion-driven.
According to an estate surveyor, Oyebisi Ajiboye, the good thing about real estate business is the freedom of practice. He says even if an individual is working with a boss, he has freedom because he would always go out for jobs that can fetch him additional money.
“If a company has property to manage, rent or sell, a boss can ask his ‘boys’ to take the client out for inspection. We call it personal practice where you are able to rent out some flats and you make money apart from your salary. That way, you build yourself so you can retain those customers for future purpose. It is also a business that in a day you can make a million if the transaction is open and the client has the money,” he says.
Ajiboye says in his over 10 years of practice, he has made a lot, in terms of cash and landed properties, “I am not complaining; property business is not so bad that is why you see so many people rushing into it, even sacked bankers,” he notes.
However, as lucrative as some of these agents say the business is, they also face some major challenges which include clients not paying their fees and most importantly, the challenges of government policies. One of the policies which they say has had adverse effect on their business is the 2011 Lagos Tenancy law which says tenants should not pay more than one year rent.
According to Moore, the policy is good but the challenges that agents face are enormous as the law favours the tenants more.
He says, “Policies should favour all the parties involved. This policy affects business because government is not really doing anything to cushion the effects through the provision of houses for the masses. If you are taking people to see property for instance and the landlord insists on taking more than one year, the intending tenant would think it is the handiwork of the agent but the truth is that agents don’t interfere, many landlords use this rent to take care of themselves in their old age.
“If the government says pay one year rent, where are the houses? The houses are few and privately owned. That means the law is not having much effect because a landlord can insist on two years rent. ”
An agent who preferred to speak on the condition of anonymity insists that the tenancy law is one sided and intended to make real estate agents miserable.
According to the source, some government officials who are at the forefront of implementing the tenancy law still insist on two-year rent for their properties.
The source says, “If you go to Marwa garden for instance, some politicians and house of assembly members who own properties there insist on two years rent and these are the same people implementing the one year rent policy. I think that policy is just meant to punish some people such as real estate agents.
“I think the solution to the problems in the real estate sector is mass provision of houses which may be on lease. Most houses provided by the government are for sale and do not get to the masses. If you go to some government houses, the landlords are mostly government officials and many of them resell. It doesn’t get to where government intends it to get to.”
Despite the outcry about the tenancy policy, however, the agents say there are some government policies that are welcome.
“There’s one policy that says property companies and road side agents should register with the Lagos State Ministry of Commerce. That policy is aimed at reducing fraud by non-professionals who take advantage of intending tenants and property owners. This is in the interest of everybody,” Ajiboye says.
Punch Nigeria
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