Qualities of a Good Investment Neighborhood

There are four key criteria that should be considered to maximize your returns and minimize risk.

Low Prices

Low prices are a key factor to consider during your investment journey with rental properties. Fortunately, Ibeju-Lekki offers some of the lowest median home prices in Lagos, making it an ideal location for real estate investors. Ibeju-Lekki’s median home prices are 40% below the Lagos median, which offers significant potential for investors looking to maximize their returns.  

When identifying neighborhoods to invest in, it’s important to focus on workforce housing neighborhoods that have home prices slightly below the already low median income prices. You should look to invest in homes priced in the range of roughly $50,000 to $100,000. By focusing on neighborhoods with affordable home prices, you can minimize your investment risk and potentially achieve higher cash flow and overall returns over time.

High Rents

High rents are a crucial consideration when it comes to investing in rental properties. Ibeju-Lekki boasts some of the best rent-to-price ratios in the country. Ibeju-lekki ‘s rent-to-price ratio is 20% better than the national average, which means that rental property investments in the region can generate positive cash flow.

Focusing on workforce housing neighborhoods that offer the sweet spot where the rent-to-price ratio is at its highest while avoiding high-crime areas is key. Rental demand is typically high in these neighborhoods, which helps to increase the rent-to-price ratio and drive positive cash flow for investors. Investors also capitalize from above-average home price appreciation, which boosts the return on investment.

Surrounded by Jobs

In Ibeju-Lekki, there are several neighborhoods that stand out in this regard. Ibeju-Lekki is home to the World’s largest Oil refinery (Dangote Refinery) which creates over 20,000 jobs in the area.

The Northside is home to Lekki Free Trade Zone, while The Lekki Deep Sea port and Alaro City boasts a range of job opportunities in the area. Additionally, the Southside is anchored by the Pan Atlantic University.

All five of these neighborhoods are located within a 15-minute drive of downtown Ibeju-Lekki. The area also boasts of several companies.

Next To a Path of Progress

Investing in neighborhoods located on the path of progress is another strategy for rental property investors looking to maximize their returns and achieve long-term financial growth. Ibeju-Lekki represents the biggest opportunity for investors to earn above-average returns on investment over the next market cycle. While commercial buildings in Ibeju-Lekki may seem like an attractive investment, buying Lands and rental properties in the neighborhoods that surround the area can offer high ROI without additional risk.

Here’s why: Over the past seven years, there has been significant development in Ibeju-Lekki, with over $15 billion in development currently underway. As more people move to Ibeju-Lekki, more businesses are opening to serve them, which is increasing jobs and median incomes in the area. This flywheel effect is bringing more people, amenities, jobs, and higher incomes to the area and is similar to what has happened in other successful areas.

Investing in neighborhoods located on the path of progress can help investors tap into this growing demand and achieve higher cash flow and overall returns over time. It’s important to act quickly as prices in these neighborhoods are likely to rise as the area continues to grow and develop. I forgot to mention that the proposed International Airport is underway in this area.