10 Common Mistakes to Avoid in Real Estate in Nigeria

Real estate in Nigeria offers tremendous opportunity—but as recent reports reveal, it also carries risk. The sheer scale of land fraud in Lagos and Ogun (over 500,000 incidents per year) is a warning sign. (Punch) Many investors, especially beginners, fall prey to mistakes that could have been avoided with a bit more preparation and due diligence. This article outlines 10 Common Mistakes to Avoid in real estate in Nigeria, drawn from real data, case studies, and best practices so you don’t become one of the statistics.

 

Mistake #1: Skipping Proper Title & Document Verification

One of the most dangerous mistakes is buying or investing in property without fully verifying ownership, title deeds, and official endorsements. Given the 95% rate of land title contestation reported in Lagos & Ogun, the risk is extremely real. (Punch)

Before any purchase, insist on:

• A genuine Certificate of Occupancy (C of O) or equivalent.

• Registered Deed of Assignment properly recorded.

• Survey plans from the Land Registry or Surveyor-General’s office.

• Proof of consent from the governor or appropriate authority, where required.

• Evidence that no litigation, multiple sales, or disputes are pending.

Ensuring this avoids becoming trapped in legal battles or discovering that what you thought was yours is not.

 

Mistake #2: Ignoring Local Laws and Regulatory Requirements

Nigeria’s land laws vary by state; customary rights, state laws (like Land Use Act), town planning, zoning, and permits differ. Many investors assume uniformity—and pay the price.

• Always research the specific regulations in that state or local government.

• Understand if Governor’s Consent is required, what zoning laws apply, or whether there are local community (customary) ownership claims.

• Be aware of regulatory changes. For example, recent reforms in Lagos have introduced digital Certificate of Occupancy systems, Electronic GIS mapping, and Land Bureau reforms to improve transparency. (Radarr Africa)

Failing to comply can result in delays, extra costs, or even nullification of transactions.

 

Mistake #3: Overlooking Hidden & Ancillary Costs

Many think the cost of purchase is the only expense—and then get surprised. Hidden costs often wipe out margins. Some common hidden costs include:

• Legal fees, surveyor fees, registry charges, stamp duty.

• Omo Onile or community fees (in peri-urban or informal areas).

• Cost of securing Governor’s Consent, planning approvals.

• Development or infrastructure levies (access roads, drainage, utilities).

• Bridging gaps in infrastructure (e.g. electricity, water, roadworks).

Factoring in these costs early ensures you don’t overstretch your budget or reduce expected returns.

 

Mistake #4: Relying Solely on Informal Agents / Brokers

Informal agents or brokers sometimes promise cheaper rates or easier deals. But often they may lack credentials, legal knowledge, or accountability.

• Confirm agent registration with regulatory bodies (for example, LASRERA in Lagos).

• Insist on seeing the agent’s licence, proof of past deals, references.

• When possible, engage real estate firms with verifiable track records.

Trustworthy agents are a cost, but the protection they offer can save far more.

 

Mistake #5: Choosing Location Without Considering Infrastructure

Land or property can appreciate only if supported by good infrastructure:

• Roads, water supply, electricity, drainage, security, schools, public transport.

• Planned or promised infrastructure is not enough—verify timelines and governmental commitment.

• Areas without access roads or those prone to floods often lose value or become difficult to rent/sell.

Even with good title, a bad location can sink your investment.

 

Mistake #6: Neglecting Market Research & Demand Patterns

Many investors misjudge what buyers or tenants in that area really want. You need to research:

• Who your likely tenant or buyer is (income range, family size, needs).

• What types of property are in demand (studio, 2-bedroom, serviced apartments, short let).

• Comparable property prices & rental yields in that exact location.

• Vacancy rates and how fast properties are being taken up.

Knowing this avoids building or buying a property that stays unoccupied or sells poorly.

 

Mistake #7: Underestimating Financing and Cashflow Constraints

Financing is more than securing a loan—it’s ensuring cashflow works out:

• Interest rates, repayment schedules, and hidden charges.

• How rental income aligns with repayments and maintenance.

• Buffer capital for delays—construction, approvals, tenancy gaps.

• Possible currency devaluation, inflation impacting costs of building materials.

Overleveraging is common—ensure your projections are conservative.

 

Mistake #8: Poor Contract Terms & Lack of Legal Safeguards

Contracts are your protection in disputes. Weak or vague contracts lead to losses.

• Use detailed written contracts specifying deliverables, timelines, quality standards.

• Include penalty clauses for defaults by either party.

• Make sure the contract is enforceable in your jurisdiction; have it reviewed by qualified real estate lawyers.

• Retain proof of payments, receipts, signed documents.

Clarity in contract terms often saves money and stress later.

 

Mistake #9: Failing to Inspect & Survey the Property Properly

Pictures, brochures, or verbal descriptions may mislead.

• Hire licensed surveyors to check boundaries, physical condition, topography.

• Visit the site at different times (day/night, wet/dry season) to assess flood risk, accessibility, noise, security.

• Check soil conditions if building.

• Inspect existing structures (if any) for quality of materials, workmanship.

An accurate physical assessment prevents nasty surprises after purchase.

 

Mistake #10: Overlooking Exit Strategy & Value-Creation Plans

Even when acquisition is successful, many investors forget the exit strategy or how to increase value:

• Consider how easy it will be to resell or lease the property. Liquidity matters.

• Think about value additions: amenities, good finishes, landscaping, security features.

• Plan for potential appreciation (government infrastructure, urban expansion).

• Have a timeline and condition under which you’ll sell or redevelop.

Without this, you may be stuck in an investment that doesn’t perform as expected.

 

Conclusion 

Real estate investment in Nigeria can be richly rewarding—but only for those who tread carefully and avoid the pitfalls. The 10 Common Mistakes to Avoid in real estate in Nigeria, as outlined above, are drawn from widely observed trends, including recent reports of rampant land fraud, poor documentation, and administrative delay.

Don’t let your investment become part of “dead capital.” If you’re ready to invest safely—verifying titles, engaging trusted agents, avoiding hidden costs—Attractive Property Plus is here to help. Contact us today for a free property risk assessment, or let us guide you through your next investment to ensure you avoid these mistakes and secure a high-quality, high-return property.