5 things land purchasers should be aware of

August 4, 2022, 9:08 pm Blog Buying Seen: 3660
5 things land purchasers should be aware of
As Africa’s real estate sector continues to grow, land acquisition especially has seen increased investor interest from both domestic and foreign buyers. According to the land matrix, investors ranging from China, the UK, Ukraine, the Gulf region and even Mozambique have collectively transacted in over 2.7 million land deals recorded across Africa since the year 2000.

Notably, as seen in the picture below, nations like Mozambique, Ethiopia, Ghana, and Zambia have appeared at the top of the pyramid with the greatest amount of land sold to foreign investors.

Although the majority of African nations have very affordable land, the informal character of the land system occasionally affects the process of acquiring land. For instance, land sales are typically handled by proprietors, family members, or leaders in rural communities, with documentation being scarce in some situations.

In this essay, we'll go over the top five things land buyers in African nations should be aware of.

Conduct due diligence
This entails both a land search to look for any encumbrances, such as prospective mortgages or disputes on the said land, and physical verification of the existence of the land.

Compare the cost to the surrounding locations.
Typically, land value is expected to increase over time. However, anecdotal evidence in multiple cities suggests that speculation on land and additional factors such as money laundering have resulted in the value of land in some areas being skewed. As a result, investors are likely to invest in overvalued land that will ultimately impact their return on investments.

Estate Intel's Land Dashboards attempt to address this issue by presenting you with a snapshot of land values over time in selected areas across different countries.

Understand the Zoning
Zoning restrictions may cause future challenges depending on the location of the site. This is because they frequently restrict usage, which may impede the actions you wish to carry out on the purchased land.

Check for the availability of ancillary infrastructure
Check for the availability of ancillary infrastructure. An investor should investigate if utilities are accessible or if there are any current concerns with the delivery of utilities such as water and electricity as part of large-scale acquisitions or inside master-planned developments. They should also think about long-term plans for developments like anticipated government developments that could result in coercive acquisition.

Understand the nature of tenure
Land tenure varies greatly across Africa. The state is considered the sole owner of property in countries such as Angola, Mozambique, Nigeria, and Tanzania. As a result, individuals cannot own land outright but can obtain a 99-year lease on it. In Kenya, on the other hand, rural land is mostly freehold, whereas urban land is leased. In other countries, such as Zimbabwe, foreign investors are almost entirely barred from making new land purchases; you either lease the land from a Zimbabwean resident or co-own it with him/her. In others, such as South Africa, the land ownership process is simple for ex-pats to own real estate.

In general, choosing the correct team to consult with is essential to making the best investment
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About the Author: Eze Saviour
Eze Saviour
ppn editor