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Dennis Isong: How to Invest in Real Estate With Little Money

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In any investment, money is engaged to bring about more money. For some capital-intensive investments like the real estate venture, much money is usually needed right from the start. We all know it’s almost impossible to start a real estate business with little finances, however, it is not entirely impossible. Property investment is a venture that takes years to bring returns, and in most cases, considerable returns are only obtained after making multiple investments. Still, the money to make these investments is seldomly available for many.

 There are strategies carried out by seasoned property investors while funding their investments and these help them put in only a little amount of money. These investors have identified and developed the knack for utilizing other people’s money to their gain. 

For anyone who hopes to make consistent earnings through real estate without the challenge of having to acquire huge capital, the below strategies are indispensable.

Forming a Partnership

Because real estates are usually expensive and most buyers may not have enough capital to purchase them, a partnership could be formed between two interested buyers to offset the cost of the property. This ensures the real property is purchased with considerably little money coming from each of the partners. Despite this advantage, the buyers need a robust partnership agreement where, among other details, the equity of each partner is clearly outlined to avoid future problems.


Investing in real properties necessarily doesn’t require one to foremostly purchase a building. You can do it with only a lease.

Leasing is an approach to real estate ownership where the owner of the property rents it out for a certain amount of money. The lessee, if permitted, can further lease out the property or units of it. Ordinarily, leases are usually lowly priced and require no heavy sum of money during upfront negotiations.

Some property owners allow an outright purchase of leased property. In this option, an agreement with the owner of the property is made for a higher rental fee to be paid periodically, usually a month. The excess amount paid after the lease fee has been isolated away is part of the payment for the property. In this way, you are investing in the property but with little amounts of money.

Special Government Schemes like the National Housing Fund (NHF)

This is a government pioneered scheme which enables various working-class citizens to own their home. Clearly defined as a loan scheme for the purchase, renovation, or building of residential apartments, it is of immense benefit to individuals unable to accumulate monthly income to build a home.


Obtaining the NHF loan enables property investors to build homes with little monthly contributions. These homes could be leased and the money derived from such used in settling off the loan amount.

The National Housing Fund has a set of requirements and guidelines for citizens hoping to obtain a loan. One of such is that the citizen must be above the age of 21 with proof of employment. Before the request for a loan, the individual must contribute for at least six months to the NHF. The maximum obtainable amount is N15 million at an interest rate of 6%. This is to be repaid within 30 years from the date of obtainment. This loan is directly managed by the Federal Mortgage Bank of Nigeria (FMBN) although an application for it could also be through a recognized primary mortgage institution.

FMBN’s Rent-to-Own Scheme

Another means through which a worker can own a property in the country with little money is through the rent-to-own scheme of the Federal Mortgage Bank of Nigeria. This scheme is similar to the national housing scheme, but the difference is that workers do not obtain this loan facility for building a home, instead, Rather, rent the property built by FMBN and subsequently purchase it outrightly.

Workers are entitled to properties whose value is limited to N15 million with prices to be redeemed within 30 years. A 9% interest rate is placed on this loan and interested workers are assured of quality cost-effective buildings.

Real Estate Investment Trusts

Owning a share in a real estate investment trust is another way to invest in property without so much money. Like your share of a company’s stock, you cannot get your money out unless it is traded to another person or the property is sold off. In Nigeria, various property companies are operating this investment model. They build offices, and residential buildings with these trusts, and then lease the building out. The profit garnered from the rent is shared out among shareholders.

One benefit of investing in real estate through investment trusts is the absence of managerial duty. All administrative tasks are done by the company and for this, an administrative fee is gleaned from profits made with the property. That wouldn’t matter much considering that just a bit of your money is under the trust.

Obtaining Home Equity Loans

This method of investing in real estate requires you to leverage the equity of your earlier acquired property to obtain a loan for yet another property. The property might be a home or a leased apartment. To obtain a good amount of equity loan, the value of the property serving as collateral must be great. Banks and several microfinance institutions do offer this kind of loan package. The interest rate might be inconsiderate, however, you wouldn’t have to spend much of your fund for the property to be obtained.

Real estate investment is a profitable venture of purchasing, owning, managing, and selling or leasing real property. It offers steady cash flow but necessarily demands time and intensive input of finances. Most often than not, these finances are from the personal keeps of investors, and for individuals with no stacks of finance, the likelihood of real estate investment might look bleak. By applying the above real estate investment strategies, having an investment or several investments in real properties is possible with little money. 

Like any kind of investment, it is recommended that decisions made should be roundly researched beforehand.



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