Revealed - 8 Ways a Small Player Can Cream Off Mega Profits From the Property Market.

Property is a money spinner, we all know, but there is the odd concensus to concede the money-making opportunities in property to a limited number of supposedly financially heeled people. Property is generally expensive, reinforcing that myth that it's only those with strong financial muscle that can play in that market. The rest accept to be humble tenants, dutifully paying their rent and digging themselves further into poverty.

Historical Performance
A decent number of the world's richest people, you probably know, built their wealth in real estate. More importantly, many started small and grew big over time. Their successes owed more to strategy than their capital outlay. The implication: even without much money, you can replicate their success by applying same or similar strategies or, better still, developing an effective self-crafted approach.

Getting Started Your Own Way
With limited resources, how can you break out of this property-is-for-the-rich syndrome and find a niche to play in the property market? Given the profit potentials of that market, don't you think it could equally be your spring-board to financial breakthrough, if only you knew how to find a window to launch into it? If you are ready to stretch yourself into this supposed turf of rich people and strive to find your bearing, we have a seven-point guide here to hand-hold you to success.

1. Invest In Property Companies
This is perhaps the easiest option, especially if you have very limited funding at your disposal: buy into companies that invest in real estate. For the quoted companies, this is a hassle-free process - you just buy their stock on the stock exchange. The key attraction here is that this option is ultra-empowering, enabling even a student that has just N5,000 to become a real estate investor. Other attractions: the company you buy into is run by a management that has relevant expertise and a pool of resources to invest even in costly but highly lucrative property businesses, indirectly giving you a bite into these otherwise exclusive market segments; if your investment fund is managed by a fund manager (by direct placement or by investing in a dedicated managed fund), you enjoy another level of expertise and diversification: the manager can switch funds based on the performance of the property companies.

If you are going for quoted companies, your two major options today will be the UACN Property Development Company PLC (a developer and investor) and Union Homes (a primary mortgage institution financing housing projects and often co-investing). Unquoted ones may also offer and opportunity to invest, so make inquiries.

2. Buy Into a Fund That Invests in Property
You see, you don't necessarily have to buy a house to reap returns from real estate. Just as with buying units of share in a property investment company, you can buy into an investment fund that has an exclusive or strong focus on the property market. Many banks and other financial institutions manage funds that invest in different economic sectors, including real estate. What's more, these funds are managed by trained, experienced professional managers who possibly can earn you more mileage. Besides, because of critical mass - there are many investors, creating sizeable investments funds - they can play in markets segments that you can't access, giving you better leverage. So, don't wait till you can build a highrise - invest through a fund.

3. Go For Land Speculation
For reasons of limited funding or pure investment strategy, land speculation may also prove a lucrative engagement for you. There are those who focus on this investment channel: buy land in up-coming areas where you foresee future growth and price appreciation and dig in and wait. Often the result comes quickly, while in other cases, a protracted wait may be required. If you choose well, excellent (sometimes outrageous) returns will be your reward. Today, much of the land lying from Aja to Epe in Lagos has been bought off, though largely undeveloped. Many of the owners have no ultimate plans to develop and are merely waiting for the right moment and price, knowing that the area will continue to record a more-than-average popullation drift.

If you choose to pursue this strategy, a word of caution. Land title, especially when you fail to develop promptly, could get slippery, particularly in high-demand locations like Lagos. Be sure you deal with rightful owners, and perhaps in a collective context (a group of buyers). A good lawyer, versed in land matters in the area of your interest, will also be a good safeguard. You may also effect some minor development, to secure effective possession, over the waiting period.

4. Buy And Renovate
To minimise your outlay, you may also target fairly worn or even dilapidated structures which you can secure at a bargain price. If you buy right, the cash outlay plus a reasonable cost of modest renovation will still leave you at a comfortable investment cost. Most times, that modest renovation you carry out will turn the property around and catapult the value. You can exit quickly, having made a decent margin.

If you go on this option, a key factor to watch is the cost of required improvements. If you grossly underestimate this, you could end up with a huge hole in your pocket. The lessen: get reliable professional assessment of the scope of deterioration and the necessary scale of restoration work. Cost carefully, adopting a worst-case approach, to determine how much to factor in for renovation cost when buying.

5. Pursue Buying And Redeveloping
Buying to redevelop is similar to renovating, except that the old structure will not count as it will be totally uprooted and replaced. A bigger investment outlay is therefore implied. This strategy will work well if an aged or unbefitting property is located in an area that commands good market value. While the environment will reflect on the price of the existing structure, if you secure and rebuild it, the value differential could be massive, yielding you a handsome return.

6. Focus On Commercial/Market Developments
Some investors focus on developing commercial outlets (stores, shopping complexes, office space, warehouses, etc) in strategic business areas. The size of such investments would vary, but we are more concerned about where a small investor could find space in this market segment. The truth, really, is that there is reasonable room for the small player. The 'magic', as in many investment actions, is in being motivated, committed and focused. Building a string of shops, which will tomorrow command high rental value and strong market price may simply require identifying, well ahead, where sizeable settlements or access infrastructure like roads will emerge. When roads pass and people settle, shops will spring up. As demand pressure mounts on the stock, their value will go up. This happens every day around us. The question is, if you'd desire to make money from real estate, why couldn't you run this simple formula that works? Besides, there are other creative ways the small investor can tap into investment opportunities in this segment. Of course, if you can undertake bigger projects or access established locations like major markets or commercial areas, your chances are even better enhanced.

7. Log Into Residential Accommodation Development
For cities like Lagos, Abuja, various state and commercial capitals, residential accommodation will remain under pressure, given the acknowledged low ratio of the housing stock. The population growth has continued to outrun the snail pace of housing development, leaving a huge, yawning gap. Little wonder that vacant property gets quickly snapped up. It is common knowledge in Lagos that you don't delay to pay when you see a property you desire. Quite often, a number of other interested parties are queued up, a development often abused by mischievous property agents who end up collecting payment from multiple sources, leaving some subscribers in the cold. What this says is that residential accommodation will remain good business in a long time to come. So, if you have money to invest, this is not yet a bursting market. You can also always find a location and house-type that could suit your pocket and still meet your returns expectation.

8. Finance Any Option Using a Mortgage Facility
We have concentrated on how you could enter the property market using the limited funding at your disposal. The truth is that you can fund any property opportunity using a mortage facility. Usually, the property itself is the collateral, meaning that the current lack of a property to use will not stop you. How do you get a mortgage facility? Speak to the mortgage banks which are sizeable in number. Most universal banks also offer mortgage products today. A first step will be to find out the requirements and how to structure a request. Armed, you can begin your search for property targets. And if a request fails, it's not the end. Other banks or same bank at another occassion, may give you the all-importatnt first break.

The list here is certainly not exhaustive, but throws a challenge as to options you can pursue to begin making money from the high-earning property sector. Unless you deliberately choose to stay off, it is clear that there are creative ways to get your feet into this business, without breaking into a bank. You only need motivation, focus and a strong will to achieve.