4 simple ways to invest in a resort in Nigeria

Have you ever stayed at a resort and thought, “I’d love to own one of these chalets or villas? Well, look no further! Here are 4 simple ways you can invest in a resort in Nigeria.

You should know before going in that investing in a resort is an excellent way to generate income, diversify your portfolio and build long-term wealth. Unlike most types of commercial real estate, resorts can adjust their room rates on a daily basis. This gives them a unique ability to raise prices to match demand and generate more income than traditional rental. More so, risks of having a tenant that can’t renew, using a lawyer to evict or tenants using your building and facilities in a way that stresses it isn’t there. In summary, resorts generally have higher returns than residential properties with less management problems. Now, there’s the misconception that Nigerians don’t travel and investing in resorts is not profitable. This is not true. In fact known brands are expanding into hospitality space and local travel and tourism is becoming the new cool. Read all about it here

Now let’s get into it!

Here are the 4 ways you can invest in a resort:

  • Develop or buy the resort
  • Buy a chalet or villa in the resort.
  • Participate in a joint ownership arrangement own or invest in a unit.
  • Invest in Developer’s construction financing for annual dividends.
  1. Develop or buy the resort

This is the most obvious way to invest in resort, but it is also the least practical for most people. Depending on your financial capacity and what your investment goals are, buying or developing a resort is a lot of work and require a ton of upfront capital. Owning and operating is a not a passive investment – even if you hire people to manage the day-to-day operations. Unless you have a real desire to be in the hospitality business or you are a real estate developer, we suggest choosing one of the other ways we have provided in this article.

The Ile Ologo Resort – A private resort on 30-acre of forest land in a safe, green and vibrant community in Iware, Oyo State

2. Buy chalets or villas in a resort

Now this is more like it for most people. You are familiar with this and it is an easier option to consider. This is almost like buying a house or a flat in a residential estate in Abuja or Lagos and listing it for annual rental or a serviced apartment. Most times you have an agent handle the property management and remit your rent annually or you handle it yourself.

In a resort, this is way more profitable because of the traffic experienced and it is also less stressful for you when it comes to the tenants issues, vacancies (void), poor management and stress on the property. Owning a chalet or villa in a resort serves as a dual-purpose. You make more money from renting it (the resort management takes care of that) and you can also go for a weekend getaway when you need a break from the hustle. Check out our chalets and villas you can invest in today.

Vacation chalet
1-bedroom villa
2-bedroom villa

3. Participate in a joint ownership arrangement to own or invest in a unit.

Ok, let’s say you don’t have that much money to develop/own a resort or buy a chalet/villa exclusively. Guess what? You can jointly own a chalet/villa with a group of friends, family members, co-workers or with a curated group provided by the resort developer. This option is best for millennials and Gen Z investors looking for new experiences and new way of doing things – including investing in real estate. Also if you are looking to diversify your portfolio to earn more but spread your capital, this is a great option too.

The joint ownership model is not a favorite for many Nigerians when it comes to real assets but The F-100 is doing a great job in pioneering this with the Ile Ologo Resort . Check out Nigeria’s first crowdfunded chalets/villas. (Click to learn more about it). Here’s a simplified overview of how it works: Choose your preferred type of accommodation (chalet/villa), get an offer letter from resort developer or join the F-100 Tribe on Crowdyvest, make payments to the developer or save on crowdyvest. Get your rental income alert in your bank account every quarter!

Watch this video on how you can start on crowdyvest.

There are two things to consider using this option. One, you cannot have the chalet or villa as a holiday home to use whenever you are stressed and need a staycation/vacation. Second, jointly owned real estate is the most illiquid way to invest in real estate. Meaning you have to hold this investment for a period of time before you can withdraw. The Ile Ologo Resort joint ownership model has a holding period of just 3 years.

Regardless, there’s some serious money to be made in crowdfunding or jointly owning a property, so accepting the lack of liquidity and the project’s execution risk can be worth it. Also, it is the easiest and cheapest way to own a piece of real estate in Nigeria.

It’s not uncommon for commercial real estate investments to generate annualized returns of 15% or more for investors in other countries and for chalets and villas at the Ile Ologo Resort, the return on investment is projected to be up to 41% after resort completion.

  • Invest in Developer’s construction financing for annual dividends.

In the UK, US and European countries, one can invest or buy a hospitality REIT. REITS (Real estate investment trusts) are similar to mutual funds, but for properties instead of stocks, bonds, or commodities. Specifically, a REIT is a special type of company that pools investor money and invests in a portfolio of real estate assets. REITs must pay at least 90% of their taxable income to shareholders, and many REITs trade on major stock exchanges, making them easy, as well as highly liquid, investments. We don’t have this arrangement in Nigeria at the moment but that is not a problem. Investor can search for developers who open to sponsorship arrangements for a return on investment. For the Ile Ologo resort, investors can finance its construction for a 19% ROI in 12 months. Start investing here or become a sponsor.

Surveying Activity at the Ile Ologo Resort.

All in all, investing in a resort is possible in Nigeria and now more than ever is the right time to diversify your investment.

Let’s help get you started!

The Ile Ologo resort is an exquisite forest resort and mixed development of vacation chalets and luxe-modern private residences set in the green, secured and welcoming community in Oyo State, Nigeria. It is co-owned by women of the F-100 Group. Read more about us here

Published by The100FGroup

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