Sell or Lease which is better in Lekki Phase1 With Current Prices?

by makarema
(Lekki)

My company spent about N116m in building a twin duplex (cost of land inclusive)at Lekki Phase1 in lagos. we have been able to sell a unit at N75m, but we seem to be having challenges selling the 2nd unit as the price have been N65m and below by most prospects.

Recently some members of my management team think we should lease the property for two years, while still exploring the chances of selling off. my question is if we lease this property for say 2 years, it might not command the same price we sold the 1st unit for.

Do we still continue to wait for a prospect or lease the property?

The property is a 4bedroom duplex plus 2 rooms BQ, fantastically finished.

Reply By Samson, Lagos Nigeria Real Estate Advisor

The two options are open to you.

However, if you decide to let it now, there is the inconvenience of conducting inspections when prospects show up.

Another thing.

When prospects discover that the tenant is fresh tenant who have just paid two years rent, it throws a new variable into the equation.

In simple words . . . it makes sense to rent out the duplex but that also introduces a new variable when you bring prospects to inspect the property. And that may elongate the time it takes for you to sell it.

There is another option.

You call sell off at the new market price and cut your losses.

The truth is . . . nobody knows when prices will pick up again. So while you may get some rental advantage from delaying selling, there is nothing that says the prices won't drop even further.

Another strategy to explore woild be the value you gain from selling at 65m and then buying another cheap land for another development.

This option accomplishes two things:

1. You get cash get further investment. Having cash is a big advantage and

2. You can take advantage of the low prices and the depressed economy and buy really low from someone who is desperate to sell.

Whatever option you go with, do what brings the most value long-term.