In today's economy, many Nigerians are still searching for the elusive “10 million naira house in Nigeria,” hoping to own a decent home in Lagos, Abuja, or Port Harcourt. However, the dream of buying a fully finished, high-standard house for this amount has become increasingly unrealistic due to rising property prices and inflation. Today, even a 1 Bedroom Houses & Apartments in a decent area in Abuja or Lagos costs between ₦30 million to ₦45 million, while a 2 bedroom goes for ₦60 million to ₦80 million, and a 3 bedroom ranges from ₦90 million to ₦120 million. Although prices may be slightly lower in Port Harcourt, a N10 million naira house is simply no longer possible in prime locations.
But does this mean that homeownership is out of reach for someone with a 10 million naira budget? Absolutely not! While buying a fully completed home may be unrealistic, there are smart ways to invest that amount wisely and still work toward owning property. In this article, we’ll explore the best options for people with a 10 million naira budget, focusing on off-plan projects, land investment, and other strategies for making the most out of your budget in today’s challenging market.
To put things into perspective, in cities like Lagos, Abuja, and Port Harcourt, a decent 1 bedroom Flat apartment for rent can go for between 2.5 million and 10.5 million naira annually. If renting such homes costs this much, it’s not feasible to expect that the same properties would be available for sale at 10 million naira. In Nigeria’s urban hubs, real estate has become increasingly expensive due to high demand and the rising cost of building materials, labor, and infrastructure development.
Consequently, while you can still find properties at the 10 million naira price point, they are unlikely to be in prime locations, nor will they boast the standards or luxury most potential buyers desire. Homes at this price are often located in more remote or less-developed areas where amenities and conveniences are limited. Many tenants looking to transition into homeownership want to own homes similar in quality, style, and location to the ones they are currently renting. However, properties in decent neighborhoods with modern amenities and urban accessibility are priced much higher than 10 million naira, dispelling the misconception of affordable luxury at this budget.
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The Reality of Real Estate Prices in Nigeria
The housing market in major cities like Lagos, Abuja, and Port Harcourt has experienced a significant surge in prices over the past few years.
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Here’s a quick breakdown of what you can expect to pay for apartments:
- 1 Bedroom Houses & Apartments: ₦30 million to ₦45 million
- 2 Bedroom Houses & Apartments: ₦60 million to ₦80 million
- 3 Bedroom Houses & Apartments: ₦90 million to ₦120 million
In rural areas or less developed parts of these cities, it’s still tough to find a decent 1 bedroom flat & Apartments for 10 million naira. Rising inflation, construction costs, and the increased demand for housing have drastically reduced what you can get for that amount. So, while a 10 million naira house in Nigeria is nearly impossible today, you can still make savvy investments that will bring you closer to homeownership.
While a 10 million naira house in Nigeria may no longer be possible in most cities, this doesn’t mean that homeownership is out of reach. By exploring alternatives like off-plan projects, land investments, and strategic partnerships, you can still make significant strides toward owning a home. The key is to start small, plan for the future, and be patient as your investments grow in value. Homeownership is a long-term goal, and with the right strategy, even a modest budget can be the first step toward securing your dream home.
Smart Investment in Off-Plan Projects
One of the smartest and most affordable options for real estate investors with a 10 million naira budget is to invest in off-plan projects. An off-plan project refers to properties still under development, which are typically sold at a lower price than completed homes. By purchasing off-plan, you benefit from lower costs, flexible payment plans, and property appreciation by the time construction is complete.
An excellent example of an off-plan opportunity is The Hof City Abuja, developed by Kairoshof and marketed by TechSphere Properties. At Hof City, you can invest in high-quality residential units in some of the capital’s most sought-after locations. For as little as 10 million naira, you can secure a deposit for a property and spread the remaining payments over several months or years, making the financial burden more manageable.
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The Hof City offers a variety of housing options, including:
- Hof City Idu
- Hof Court Jahi
- Hof Court Kafe (Gwarinpa)
- Hof Court Karmo
- Hof Community, Idogwari (Lifecamp)
- Hof Community, Karsana
These estates are located in rapidly developing areas, offering great potential for property appreciation. A 2 bedroom apartment in Hof City, for instance, might eventually cost ₦60 million to ₦80 million upon completion, but you can secure it for as low as ₦35 million during the off-plan phase. With as little as 10 million naira, you can make a deposit on an apartment in one of these high-potential areas.
By choosing an off-plan investment, you benefit from flexible payment terms, a substantial discount compared to the market rate, and the opportunity for your property to appreciate in value before completion. This is especially attractive for investors with a long-term mindset who want to build wealth over time.
Alternative Solutions for Homebuyers with a 10 Million Naira Budget
If an off-plan project isn’t for you, here are several other ways to invest your 10 million naira smartly and work toward homeownership:
- Take Out a Loan or Mortgage: If you have a steady income, consider applying for a home loan or mortgage. Many banks and mortgage institutions in Nigeria offer loans specifically for homebuyers, allowing you to stretch your 10 million naira into a much larger amount for purchasing a property. Look for mortgage products with favorable terms and interest rates.
- Collaboration or Partnership: Partnering with friends or family is a great way to pool resources and invest in a property together. This approach allows you to access better locations and larger plots, reducing the financial burden on each partner.
- Rent-to-Own Schemes: Some developers and estate managers offer rent-to-own schemes, where a portion of your rent goes toward the eventual purchase of the property. This can be a practical solution for those who cannot afford a full down payment but want to work toward homeownership.
- Buy Land: While a completed house may be out of reach, investing in land is still possible with 10 million naira. In developing areas of Abuja, Lagos, and beyond, you can purchase a plot of land with good future potential. In more desirable parts of Abuja and Lagos, a buildable plot of land can cost between ₦12 million to ₦15 million or more. As development continues, land prices will only increase, making this a sound investment.
- Consider Joint Ventures: Another great option is joint ventures, where you team up with developers or landowners to invest in a larger property. This gives you access to prime locations and bigger projects that you otherwise couldn’t afford alone.
- Real Estate Investment Trusts (REITs): If direct homeownership is out of reach, consider investing in Real Estate Investment Trusts (REITs). REITs allow you to invest in a diversified portfolio of real estate properties without the hassle of managing them yourself. This can generate passive income and provide long-term capital appreciation.
- Real Estate Crowdfunding: Another emerging option is real estate crowdfunding, where you and other investors pool funds to invest in larger real estate projects. This can be a great way to gain exposure to bigger opportunities with a smaller initial investment.
Why Start Small and Think Big
For those starting with a smaller budget, the key is to think long-term. You don’t need a massive plot of land or a large apartment to begin building wealth through real estate.
Consider the following:
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- Start with Smaller Plots: Invest in smaller plots of land in developing areas with high growth potential. As infrastructure and amenities improve, the value of your property will increase.
- Research Government Programs: Explore government housing programs or grants for first-time homebuyers or low-income earners. These programs may offer reduced down payments or special mortgage products to make homeownership more affordable.
- Phased Development: If you invest in land, consider phased development, where you start building your home in stages as your budget allows. This allows you to spread out the cost over time.
For more practical advice on how to transition from tenant to homeowner, especially in today’s challenging real estate market, consider reading books offering practical advice on real estate investment, off-plan purchases, land acquisition, and more, tailored to the Nigerian context.
Understanding Mortgages in Nigeria
There are several pathways to buying a house with a mortgage in Nigeria. The first option is the traditional bank mortgage, which has a double-digit interest rate starting at 28%, while the second pathway is through the National Housing Fund, which requires a subscription and operation of an NHF contribution account. The third pathway, which has received much acceptance, is the Ministry of Finance Real Estate Investment Fund (MREIF). Buying a house with a mortgage in Nigeria has always been a less desirable path due to the high interest rate of 28% and above offered by commercial banks. However, with this new initiative, the mortgage option is now an attractive option.
The federal government has introduced a single-digit interest mortgage loan tagged the Ministry of Finance Real Estate Investment Fund (MREIF). This new initiative is a 9.75% interest rate mortgage loan.
Who Can Buy a House with a Mortgage in Nigeria?
The new mortgage initiative is available for both Nigerians in Nigeria and Nigerians in Diaspora. It is also available for employees and self-employed individuals. The criteria for being qualified are age and earning capabilities. This also affects the amount you are entitled to.
What Type of House Can You Buy with a Mortgage in Nigeria?
You can buy any type of house with a mortgage in any location in Nigeria. Common property types in Nigeria are:
- Flats and apartments:
- 1 bedroom apartment
- 2 bedroom apartment
- 3 bedroom apartment
- 4 bedroom apartment
- 5 bedroom apartment
- Detached houses:
- 2 bedroom detached duplex
- 3 bedroom detached duplex
- 4 bedroom detached duplex
- 5 bedroom detached duplex
- 6+ bedroom detached duplex
- Semi Detached Duplex
- 2 bedroom semi-detached duplex
- 3 bedroom semi-detached duplex
- 4 bedroom semi-detached duplex
- 5 bedroom semi-detached duplex
- 6+ bedroom semi-detached duplex
- Terraced Duplex / Townhouses
- 2 bedroom terraced duplex
- 3 bedroom terraced duplex
- 4 bedroom terraced duplex
- 5 bedroom terraced duplex
- 6+ bedroom terraced duplex
Mortgage can also be used to acquire:
- Affordable homes for sale
- Distress properties for sale
- Ready to move-in properties for sale
So it does not matter whether you are applying to buy a finished or newly built property or a yet-to-be-finished property. It also does not matter whether you are buying from the primary market (directly from the developer) or from the secondary market (from a subsequent owner).
Procedure to Buying a House with a Mortgage in Nigeria
Step 1: Find the desired property: In order to apply for a mortgage, you may want to first search for the property you wish to buy. This process includes speaking with an experienced real estate agency company.
Step 2: Get an offer letter and a copy of the property title document: Once you have found the desired property and have concluded inspections and negotiations with the seller, you would then request an offer letter that states the information of the property as well as the price. Attached to the offer letter would be a copy of the title document. Both the offer letter and the title documents would be taken to the bank for processing. Upon submission of the documents to the bank, the bank would then conduct an assessment of your financial status in order to determine how much you are eligible to get. Also, the bank would conduct a thorough assessment and due diligence of the property to be sure there is no scam or fraud involved.
Step 3: Approval and Funding: Once the bank has done all its assessment and findings, it would then approve the mortgage application and fund your account with the mortgage amount. The down payment expected from you must have been shown to be available and must be in your bank account to be funded.
Once you find a property you like, you can contact a property marketing company for inspection, to find out more about the property, and to also get any information or document required by the financial institution (your bank).
Please note: Property marketing companies do not provide mortgage loans or any other credit facility. Only banks and financial institutions provide mortgage and other credit facilities.
Frequently Asked Questions About Buying A House With A Mortgage in Nigeria
Can I buy land with a mortgage?
No, you cannot buy land with a mortgage. Only houses are eligible to be purchased with a mortgage.
Are there specific houses that can be bought with a mortgage?
There are no specific houses. All houses qualify for a mortgage as long as they have a genuine title.
How much loan can I access in total?
The MREIF loan allows you to access a total of 100 million. However, a pre-qualification assessment has to be done based on your age and monthly net income to determine how much you are eligible to.
What if my 10% and the entire Mreif mortgage is not able to cover the purchase of the property?
You can apply for the traditional bank mortgage loan to balance up. However, the traditional bank loan has a higher interest rate which is between 28% - 35% depending on the bank. If you are married, your spouse, if eligible, may also take up a mortgage towards contribution for the property purchase price.
How long do I have to pay the mortgage?
Maximum loan tenure is 20 years.
Real Estate Investment Options Under 1 Million Naira
There are so many real estate investments for under 1million naira. As an investor who has as low as 1 million naira, looking into a real estate investment is a cool decision. So many people ask “What kind of investment can under 1million naira do for me?
Land Banking
Land banking is an investment in real estate where an investor buys land at a cheap rate in an underdeveloped or developing community and holds it for a few years before reselling it at a profit price. Land banking has been in existence over time but it gained global recognition in the past few years. In recent discoveries, some underdeveloped communities sell plots of land for as low as 300,000. You can buy like 3 or 4 plots of land with that under 1million naira and sell in 4-5 years making about times three of your investment.
Joint Investment
In a joint investment, more than two persons can pool resources together to purchase and develop real estate property. This strategy will allow for a reduction in the amount of capital by each investor and allows you to invest in more profitable projects. For this investment to be realistic and beneficial, you must connect with investors of like minds and ensure that the whole process is backed up with a legal agreement outlining each investor's responsibilities and profit-sharing arrangements.
Rental Properties
Rental properties are real estate assets owned by individuals or entities that are rented out to tenants for a specified period. These properties offer a space for tenants to live or conduct business in exchange for monthly rent payments. As a real estate investor, you can equally rent a nice apartment, furnish it, and let it out to people for a huge amount for a period of time. Some people who travel to the country may not want to stay in a hotel or their family houses, this is where a real estate investor who deals with rental properties comes in.
Buy Now, Pay Small Small
Recently, real estate companies have introduced what we call "Buy now pay small small." What this means is that you can buy a plot of land/property, deposit at least 30% of the cost, and pay the rest over a given period of time.
Renovate and Sell
A real estate investor can buy old properties and renovate them for sale. This usually yields profit when properly renovated. It is also important to observe the kind of property you are buying and the amount it will cost you to renovate it.
Table: Summary of Real Estate Investment Options with a 10 Million Naira Budget
| Investment Option | Description | Potential Benefits |
|---|---|---|
| Off-Plan Projects | Investing in properties still under development. | Lower costs, flexible payment plans, property appreciation. |
| Land Banking | Buying land in developing areas and holding it for future resale. | Potential for high returns as the area develops. |
| Joint Investment | Pooling resources with other investors to purchase property. | Reduces individual capital, allows for investment in more profitable projects. |
| Rental Properties | Renting out furnished apartments to tenants. | Generates rental income. |
| Buy Now, Pay Small Small | Purchasing property with a deposit and paying the rest over time. | Makes property ownership more accessible with manageable payments. |
| Renovate and Sell | Buying old properties and renovating them for sale. | Potential for profit when the property is properly renovated. |
