3 Important Items to Add to Your Due Diligence Checklist

3 Important Items to Add to Your Due Diligence Checklist

3 Important Items to Add to Your Due Diligence Checklist

6th September, 2022

2 minutes, 17 seconds read

As a general rule, prospective homebuyers understand the basic sense of due diligence. In simple terms, “look before you leap”. Legal due diligence which usually takes the most focus is only one of the important aspects. Full scope real estate due diligence is complex with many aspects to it. In broad terms, there are legal, financial, environmental, technical, cadastral, market and tax aspects to consider.

Out of these, Property value positioning within the local environment, professional home Inspection requirements and future market value are essential but often overlooked. You need to add them to your due diligence checklist. The challenges that arise in not properly investigating these details tend to bite on the tail after purchase is complete. If you are familiar with property acquisition in Nigeria, then you understand how frustrating this can get.

Property Value Positioning – Is the price right for this property?

When you consider the local market where the property is domiciled, are the parameters in your favor? This step in due diligence is the Local Market Value evaluation. You will need to take a look at the history of the price movements in that area. Rental value, capital appreciation, yield & ROI, market trends, and others are great options to start with.

You can enlist the help of a real estate consultant who is familiar with the terrain to pick out the fine details on your behalf. The outcome of your activities in this step can even place you in a better position to review your offer and negotiate more favorable terms for the purchase.

Professional Home Inspection – Are you really getting what you see?

This is an offshoot of cadastral due diligence. It involves an onsite inspection of a property’s condition and structure by qualified professionals like Civil Engineers, Structural Engineers or Building Engineers. You need a thorough assessment to ensure the construction was done to specification in the building plans, that the land registry documents and title deeds correspond accurately with each other to give a true representation of the plot and property.

Basically, separate the fancy physical look from what’s on paper. Is this building durable in the long term?

Potential Future Valuation- Can I make money from this property in the future?

This bit is encouraged on the basis of planning ahead using the market realities. Should you decide to sell in the future, how valuable will this property be? For example, if you were to put up a 3-bedroom flat for sale in Lekki, what factors now influence the amount of work you need to do to get the property up to standard and if losses arise, are there options to create a better deal for yourself?

You need to determine your holding period and consider various trends related to it that will affect future pricing.

As always, remember to enlist the help of professionals when purchasing a property. At BuyLetLive, we have properties for sale and Lands for sale in Lagos and other parts of the country. We can help you inspect property documents and fulfil certain aspects of search requirements for properties. Reach out to us on +234 913 103 7985 or visit here to get started.


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5th October, 2022

3 minutes, 7 seconds read

Top 3 locations to live as a young family in Lagos

The factors that people consider when deciding on where to live vary with the different stages of life of the individual(s) involved. Things like cost, taste and fashion, proximity to work and family e.t.c are top on this list of factors depending o demography, income level and lifestyle. For instance, the availability of clubs, restaurants and other lifestyle amenities, maybe a major consideration for a young person who enjoys nightlife. On the other hand, a 70-year-old retiree would most likely be more concerned about living in a safe neighbourhood with quality healthcare facilities.  

There are many things to think about and prioritize when choosing a place. Typically, your commute time and, ultimately, the quality of life for you and your family, are influenced by where you reside. Some factors are more readily apparent than others. For young families, figuring out where to live and raise children, especially in “the busy Lagos” can be challenging. We have considered a number of factors, including the availability of quality schools, recreation and health facilities, among others and have profiled the best 3 locations to raise a family in Lagos. While there might not be a perfect location that satisfies all of your demands, hopefully, these suggestions will help you make an informed choice that is right for you.

Lekki Phase 1

Lekki Phase 1 emerged as the number one young-family-friendly location in Lagos State. Historically, Lekki Phase 1 has built a reputation for housing some of the best schools, hospitals and recreation centres in Lagos. Towards the end of 2021, Edusko, an education marketplace did an analysis of top schools in Lagos based on their performance in the international and national examinations, performance in both local and international competitions (academic and extracurricular), as well as their alumni achievements in recent years. Based on the analysis, Lekki Phase 1 houses 31% of the schools that fall within the top 25 schools in Lagos. With respect to healthcare, Lekki Phase 1 is also home to approximately 13% of the top 25 hospitals that we profiled in Lagos. Additionally, Lekki Phase 1 also has more than 20% of family/kid-centric recreation centres in Lagos including Upbeat and Fun Factory.

Ikeja GRA

Coming second on the ranking is Ikeja GRA. The Government Reserved Area is particularly notable for housing some of Lagos’ best hospitals and clinics, including the recently launched 72-bed Duchess Hospital on Joel Ogunnaike Street. Other notable hospitals in the neighbourhood include Reddington Hospital, Eko House Hospital, and Genesis Specialist Hospital, among others. Based on our analysis, Ikeja GRA is home to 12.5% of Lagos' best schools, 25% of the State’s best hospitals, and up to 20% of the City’s best recreation centres. Outside its serenity and good road network, Ikeja also has the most family-friendly restaurants, grocery stores and a lot of fun places for you and your young family to bond.

Ikoyi

Ikoyi is notably expensive, but if you are looking for a place where your kids can meet the children of the big wigs in society, then it might just be the best place. Gleaning from our analysis, Ikoyi emerged as the 3rd best location to raise a family in Lagos. With 9.4%, 12.5% and 20% of the best schools, hospitals and recreation centres respectively located here, Ikoyi is an ideal location to raise kids, with a quality of life that is almost at par with what you will find in some of the most advanced cities around the world. 


Closing thought

Barring concerns about high rental/property value, and some other personal nuances, Lekki Phase 1, Ikeja GRA and Ikoyi are the top 3 locations to raise your family in Lagos. In the end, the location you choose will be the one that checks off enough of your own requirements. Having said that, we hope that some of the three factors we've outlined in this piece will be helpful to you the next time you're trying to pick where to reside.

If you are looking to rent or buy an apartment or get a shortlet, go to BuyLetLive.com and find properties that meet your requirements. If you are an agent, developer or landlord, visit the signup page on BuyLetLive.com to create an account and advertise your properties.

We like to hear from you. Send us your comments to research@buyletlive.com and follow us across all our social media pages to keep updated.

26th September, 2022

2 minutes, 52 seconds read

Surging Inflation and how it is impacting the Lagos Residential Rental Market

In the last 12 months, Nigerians have referred to the economic situation as very daunting, especially for new renters in Lagos. With inflation surging over 20% in August 2022, the economic climate has not been very favourable for most low to middle-income earners in Nigeria. As the rising cost of goods and services continues to drive people to spend more in exchange for fewer items, Nigerians are constantly looking out for opportunities to cut down their expenses. 

One way we have seen this play out is in regard to new leases. Over the last half year, our interaction with real estate agents in Lagos has shown that existing tenants who before now considered moving to new apartments are reconsidering. The reasons for this move seem obvious. Cost! When we dug deeper, we found out that moving at this time can cost you almost twice what it will take to continue in your current space, and prospective renters have come to this realization. But why is this?


Rent has surged over 20% in the past 12 months.

If you are looking to rent a new apartment, it is most likely that you will spend 20% more for the same type of apartment in the same location than you would have one year ago. For tenants who have stayed long in their old apartment, the percentage increase will likely be more than that. Where the apartment is newer, especially with modern amenities, the additional premium being charged by Developers and Landlords can go as high as 30% or more depending on the location. When considered holistically, this additional rental burden is a major discouragement for people looking to relocate or move into newer apartments.


Agency commission, legal fees and caution deposits can cost as much as 50% of the rent.

In most parts of the world, traditional estate agents' fees range from 0.5% to 5%, depending on the value of the transaction and negotiating power of the parties. In the UK for instance, the range is 0.75% to 3% according to MoveWise, a UK-based real estate advisor. In the US, the commission is usually between 4% to 6%. Across most African cities, the percentage is higher and can range between 5% and 10%. We have found that for residential rentals especially of less than 10m value, most agents usually insist on a 10% agency commission. In some locations around Lagos, they can go as high as 20% for rental properties of less than a million. In addition to this, a 10% legal fee is usually mandatory, and some landlords can charge as high as 20% extra as a caution deposit. The impact of this is that it shoots up the total amount that prospective tenants end up paying for new leases, and has been a major discouraging factor for most prospects.


The additional hassle of moving and settling in can be very daunting in busy Lagos

Relocation costs can make things worse, but outside the financial cost, the hassle that comes with it wears out quite a number of people. Based on a sample relocation cost quote we got from Packmyload and a number of other Nigerian-based logistics companies, it costs a minimum of 150,000 to move furnishing items in a 2-bedroom apartment in Ikeja to Lekki Phase 1. Judging from the average rental price data that we are currently tracking Lekki Phase 1, this means that a prospective renter will need to pay between 5% and 10% of the rent on logistics.


Closing thoughts.

When considered individually, these costs may be insignificant but can sum up to almost the same amount that a prospective tenant is paying as rent, or even more. What has been your experience with renting a new apartment in Lagos? Share with us by sending a DM or commenting on our social media handles. 


If you are looking to rent or buy an apartment or get a shortlet, go to BuyLetLive.com and find properties that meet your requirements. If you are an agent, developer or landlord, visit the signup page on BuyLetLive.com to create an account and advertise your properties.