09/06/2016
HOSTEL DEVELOPMENT FOR STUDENTS: ONE SURE WAY OF MAKING MONEY IN REAL ESTATE:
INTRODUCTION:
One of the ways of making money in real estate in Nigeria is by building student hostels.
Nigeria, with an estimated population of 170 million, has the largest population in Africa and
still counting. The educational sector has been consistently
underfunded and the infrastructural deficit is
alarming. Apart from the lack of adequate, quality and modern equipments, books and
sufficient number of qualified manpower, there is also lack of adequate infrastructures such as student hostels in most of our higher institutions. Only few higher institutions, both public and private, can boast of sufficient accommodation for all the students willing to live on
campus. This gap has created opportunities that have made some investors rich.
In another vein, this short fall in the provision of student
accommodation by higher institutions of learning is not peculiar to Nigeria. Almost in all
nations, there is always the choice to live on campus or to secure private hostel
accommodations. The student rental market is thus an international opportunity. The reason being that provision of student housing is not seen as a core business of educational
institutions compared to other pressing needs such as research centres, lecture halls, creating new departments and provision of libraries.
Tactically, by providing few hostel accommodations such institutions have ‘outsourced’ their accommodation to private investors like you who can turn it into a cash flow machine.
Having addressed the challenge witnessed by those concerned in providing suitable and adequate housing for the ever-increasing
student population in our various institutions, it must be stated clearly here that the “so
called”housing shortage in our student housing sector has created great investment opportunities for entrepreneurs in Nigeria. In view of the
deplorable state of the hostels in most campuses aside the private ones, a good number of the
student population would prefer to get a decent and comfortable private accommodation other than the one obtainable in their institutions at whatever price. This is the more reason why an
investment as such becomes a money spinning affair. So if you are a landlord of apartments in
areas close to universities, polytechnics and colleges of Education, then you may just have landed yourself a goldmine; one of the surest way to get high returns on your investment. This
real estate business will guarantee you decent flow of wealth annually.
One good fact is that students would not remain there forever and by the nature of their
programme you should make their rental term not more than a year. Always insist on a security deposit. If you collect rents annually, you’ll not lose any money during their vacation period and their security deposit should caution them against damages to your property.
You should have clear rules and regulations on common areas, noise and payment for utilities.
Ensure that you have accurate data on their parent/guardian and their faculty/department. A resident manager who is experienced and disciplined is necessary if your facility is big
otherwise your property manager can visit once in a while. Make it clear that all forms of
illegal activities or fracas will
not be tolerated and are causes for immediate termination of their lease and eviction. Maintain a reputation for quality and discipline and your facility will generally attract the best
and at a premium.
A lot of nigerian banks are now involve in it, for example spring bank ,zenith bank etc are
now having stakes in some of the institutions. I know of an investor who owns more than four building hostels for students, he started with one and building the investment using bank loan.
HOW ? He first build a 30 rooms self contain hostel for student @ a rent of 95k per one per year. That means he make a total of #2,850,000.00. (Two Million, Eight Hundred and Fifty Thousand Naira Only). Then how he build the next hostel was to take a loan from the bank, using the first hostel as a collateral, therefore he started making a total of 5,700,000. (Five Million, seven hundred
thousand naira only). He paid less than four million naira to the bank yearly for the loan to last
for the agreed period, with this method he build almost two hostels yearly. He is busy investing for the future of his children because after paying for
all loans, the property becomes his and his children forever, even on retirement , he keep enjoying his investment. Many people do not care to invest for retirement and old age, property investment remain the best investment for that.
ADVANTAGES OF INVESTING IN STUDENTS HOSTEL.
HIGH RENT: Irrespective of the location, student hostels command great rents because
of the traffic of students especially when a new session just begins. Demand is often higher than supply driving up rent for the property.
==> QUICK RETURN: Students rent hostels on a yearly basis. You are guaranteed of occupants year in year out. This enable you recover your investments in a short time. You can save towards building a new hostel or expanding the existing one.
==> NO RENT OWED: Contract with student occupants is usually on a yearly basis. New occupants have to pay before moving in.
Students’ stay is short so you can easily increase rent gradually.
LAND AVAILABLE FOR SALE @ FEDERAL POLYTECHNICS NEKEDE, OWERRI, FEDERAL UNIVERSITY OF TECHNOLOGY, OWERRI, IMO STATE
UNIVERSITY, OWERRI, IMO STATE POLYTECHNICS, UMUAGWO. We have land in other universities, polytechnics and collages of education in the south south and south east. We have specialist
for development and management.
Contact; DOUBLE INTEGRATION MULTI-PROJECTS SERVICES @
Ph: Plot 144 trans Amadi road,
Owerri: No 22 Egbu Road Owerri. Call Engr Gordon on:08022799569
