Many people see paying rent as wasting money and buying land as the ultimate investment. I Can’t lie I think that too. However, this ignores liquidity and opportunity cost. If you sink ₦5 million into a plot of land that is difficult to resell (illiquid) or develops slower than expected, you are stuck. Meanwhile, the person who rents can remain mobile, relocate for a higher paying job, or use their capital to start a business without the headache of community thieves and land grabbers. The question challenges the idea that buying property is always the superior financial move when you don’t yet have surplus cash.
Renting is NOT wasting money if you don't have surplus cash. Buying land too early can trap you. Everybody will shout "buy land, rent is waste" but they are ignoring Two(2) things: Liquidity and Opportunity Cost. Let me give an easy explanation to them:- 1. Liquidity = How fast can you turn it backRead more
Renting is NOT wasting money if you don’t have surplus cash. Buying land too early can trap you.
Everybody will shout “buy land, rent is waste” but they are ignoring Two(2) things: Liquidity and Opportunity Cost.
Let me give an easy explanation to them:-
1. Liquidity = How fast can you turn it back to cash when you need it ?
If you put your ₦5M savings into a plot in Epe, Ibeju-Lekki or some new estate in Ibadan, can you sell it tomorrow if you have an emergency, or need money for business or Japa ?
No. It can take 6 months, 1 year, 2 years to find buyer. And you will sell at a loss if you are desperate. Plus you will still pay agent, lawyer, omonile settlement again.
That plot is illiquid – money is locked.
But if that ₦5M is in Treasury Bills, Money Market, or even your business, you can collect it in 24-72 hours.
2. Opportunity Cost = What else could that ₦5M have done for you ?
That ₦5M land in a bush is not bringing you money. But if you continue renting for ₦700k/year and use the remaining ₦4.3M to:-
– Start a business that brings ₦150k/month
– Move to Lagos/Ibadan where salary is ₦250k instead of ₦120k where land is cheap
– Pay for a tech skill, certification, masters that doubles your income
Then you have made MORE than the land would have appreciated.
The person renting remains mobile. He can relocate for a better job. The person who sank everything in land is stuck in one place, still paying for land guard, fencing, and fighting land grabbers / community thieves who say “you must pay foundation money.”
So, when should you BUY LAND and when should you CONTINUE RENTING ?
CONTINUE RENTING if:-
– That ₦5M is ALL your savings. Don’t empty your account for land.
– The land is in a very undeveloped area with no road, no light, no people – “appreciation in 5 years” is just marketer talk.
– You don’t have a verified title – No C of O, no Governor’s Consent, no registered survey. 70% of cheap land cases end in Omonile wahala.
– Your rent is less than 25% of your income. You are still okay.
BUY LAND if:-
– You have surplus – meaning after buying, you still have 6 months emergency fund + business capital.
– Title is clean and you have physically inspected it. Not video only.
– It’s in a path of development where people are actually living NOW, not in 2030.
– You have money to fence and get documentation immediately after buying. Unfenced land is invitation for land grabbers to resell it.
If you are still building your income, renting cheap and investing the difference in a liquid, income-producing asset is smarter than locking it in bush land that gives you headache.
Land is a great investment, but it is the LAST investment, not the first. First build cash flow, then use profit to buy land.
See lessInvesting in illiquid investments is a good idea. But one thing you should know is this. Don't get a land and be stranded in paying rent If you must buy a land get a land in an area that has development potential. Like a place where you see people coming to invest not a dormant place where for you tRead more
Investing in illiquid investments is a good idea. But one thing you should know is this. Don’t get a land and be stranded in paying rent
If you must buy a land get a land in an area that has development potential. Like a place where you see people coming to invest not a dormant place where for you to maybe sell it later would be a problem and also
That money can be invested in mutual funds and grow. You can even get increase and your money is preserved.
A land can later be claimed later if you don’t follow legal procedures and even if you follow legal procedures a government can take it in our country so just go in mutual funds for now.
See lessI don't think the right question is simply, "Is buying land better than renting?" The better question is: What is the best use of my money at this stage of my life? Buying land can be a good long-term investment, especially when the location has strong development potential and the title and ownershRead more
I don’t think the right question is simply, “Is buying land better than renting?”
The better question is: What is the best use of my money at this stage of my life?
Buying land can be a good long-term investment, especially when the location has strong development potential and the title and ownership documents have been properly verified. But land is not automatically a good investment just because it is land.
Before buying, consider:
• Location: Is the area actually developing, or are you only hearing promises about future development?
• Documentation: Can the seller’s ownership and title be independently verified? Land documentation and registration can be complicated in Nigeria, so this should never be treated casually.
• Liquidity: If you need your money urgently, how easily can you sell the land at a fair price?
• Opportunity cost: If you put ₦5 million into land, what other productive use of that ₦5 million are you giving up?
• Your housing situation: If you still need somewhere to live, buying land may not solve your immediate housing problem because you may still need to rent while waiting to build.
• Your financial stability: Don’t use your emergency fund or money needed for your business and basic needs just to acquire land.
Renting isn’t necessarily “throwing money away” either. You’re paying for a service: the use of a home without taking on the full responsibility and capital requirement of ownership.
So, for me, land versus renting is not an either-or investment rule. It depends on your income, savings, housing needs, location, investment horizon, and what the money could accomplish elsewhere.
If you have surplus money, a good emergency cushion, stable income, and you’ve found properly verified land in a location with genuine growth potential, buying can make sense.
But if buying the land would leave you financially stranded, renting while building your financial foundation may actually be the wiser decision.
The goal isn’t simply to own land. The goal is to make your money work for your long-term financial stability.
See lessWhile buying land is good and considered a great investment, you need to know when and where to buy it from. If you are in your 20s, you don't need to buy land unless you want to preserve your wealth. You might consider concentrating on growing your wealth and business first, and then using the incoRead more
While buying land is good and considered a great investment, you need to know when and where to buy it from. If you are in your 20s, you don’t need to buy land unless you want to preserve your wealth. You might consider concentrating on growing your wealth and business first, and then using the income from these ventures to purchase land and protect your wealth.
See lessThis is a very good question, and I will say it is one of the major concerns for many Nigerians. But again, it depends on the individual's situation at the moment and their future goals and objectives. I mean, who would want to pay, say, 5 million naira in rent every year in a place like Abuja whenRead more
This is a very good question, and I will say it is one of the major concerns for many Nigerians. But again, it depends on the individual’s situation at the moment and their future goals and objectives.
I mean, who would want to pay, say, 5 million naira in rent every year in a place like Abuja when you could buy land and start building a small structure for yourself? However, when you consider what it would take to purchase land and build a house within 6 months to a year, it’s not a small amount of money either.
In summary, I would just say you need to sit down, weigh your options, and determine which choice works best for you based on your current situation and future plans.
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