How low income earners can own homes without bank loan, mortgage

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The rough terrain of Nigerian economy, reflected in stifled disposable income, relatively high inflation rate and high cost of living, has made home ownership a difficult task for low-income earners.

Given these challenges, a large number of low-income earners have jettisoned plans of owning homes, even as they struggle to meet the basic needs of life.

Nigeria’s housing shortage is stuck between 17 and 20 million units, and has not seen any big improvement, despite various efforts of government to deliver housing facility to its teeming population.

Moreso, deposit money banks and mortgage houses threaten low-income earners’ dream of becoming home owners given the high interest rate charged on credit facility.

But the long-desired goal of people in this category to become landlords is possible without applying for bank loan or mortgage as they can purchase landed properties at a relatively cheap price in underdeveloped areas with good prospects for capital appreciation.

“The fact is that low-income earners lack the financial capacity to buy virgin land or finished houses in highbrow areas, but they can take position in the ones in low-urbanized areas with potentials for development,” Daniel Ojo, broker at HSAgency, told BusinessDay.

Properties in these locations are relatively affordable, and come with flexible payment arrangements that make it easy for potential buyers to pay within a certain timeline, without feeling the pangs if they were to make an outright payment.

Using Simawa, Ogun state, as example, the price of a plot of land (600 square metres) is about N700, 000, according to BusinessDay check, with a 5-year maximum payment plan. This implies that one will pay a fixed sum for a certain period, say 3 year (36 months) or 4 years (48 months) depending on his choice.

While this encourages participation among low-income earners, …