Real estate in Nigeria is very lucrative and real estate buyers or sellers are often faced with the question of when to buy properties or sell off properties in the course of investment decisions. To help such buyers or sellers make a good decision, we are going to give some valuable tips on real estate investment to help in the decision of buying a property or selling a property using the economics principle of opportunity cost.
Advice For Sellers: You may think you are to hold on to your property because you observed comparable properties are selling at a lower price during a certain season. Well, I want to say if you have a good reason to sell, don’t put it off. Your loss is not necessarily the money you lose by selling the property, but rather the opportunity cost (the value of what you gave up because you sell it). An example is selling to acquire and move into your dream home or buying land in a neighboorhood. Opportunity cost according to economics is the cost you incur by giving up something for another, and if this pays off, then why holding on to your property if you can sell it to get something else that will appreciate with time and even faster when you invest in a new property in a high selling neighboorhood.
Advice For the Buyers: Property Buyers in Lagos or Abuja for example often say a property is expensive compared to what they used to be some couple of years back. What is not factored in is that real estate properties appreciate with time and will in the long-run continue to raise under the ideal situation. You may say you are paying “too much” for a property now, but if you think in the long-run and look back, you may incur the opportunity cost of parting with your money now, but with the gain of earning continuous premium on the property acquired in the future which could be greater than what you think is “too much” money you initially paid for the property.
Property buyers or sellers should remember that time is something that you cannot roll back, so make the wise investment decision today. We at Sir Ej Resources Limited are posied in helping you make that successful real estate investment decision based on a carefully examined opportunity cost of your investment.