The fact that we have a housing deficit of approximately 18 million is common news. The governments at both federal and state levels have initiated several housing programmes with the aim of reducing this deficit and making housing more affordable.
Many would-be investors often question the sincerity of government in starting these initiatives. Some often wonder whether or not the project will be successfully completed. But like someone said, some people see a problem in every opportunity while others see an opportunity in every problem. If we look well enough, there are opportunities for those who understand and participate in these schemes.
Government schemes are generally commercial or residential areas where the government has acquired several hectares of land, compensated the original owners, surveyed and divided the area into layouts. The government then advertises these layouts and allocates to those who meet the stated requirements. These requirements could include tax payments, development fees payment and other forms of documentation. Once the allottee has completed the payments as well as documentations, he or she will be issued with a certificate of occupancy. In these schemes, the government is responsible for the provision of infrastructure such as road and electricity.
The process of getting the allocation can be very competitive but the advantages of a government scheme are worth the effort. One of the major reasons why government schemes are attractive is the safety of your investment. Many investors have lost a significant amount of money to traditional land owners, who believe in selling parcels of land multiple times without any regard to the law of the land. They find it very attractive to trespass on land that they have sold already. This is not the case in government schemes. Once you are compliant with the terms and conditions of your allocation, you can go to rest.
In many areas, developments are haphazard and infrastructure takes several years to put in place. However,the chances of government schemes experiencing development are higher. The schemes are generally well laid out and there is proper monitoring of the estate.There are development guidelines and strict enforcement of those rules. It is highly unlikely that a person will get away with constructing his or her house on an access road. Unlike what happens in many areas, the activities of agents of traditional land owners who normally harass those who want to develop their property are barred.
Due to the overall peaceful environment and the general calibre of residents, these schemes generally enjoy steady growth and appreciation. The residents association is usually strong and always insists on maintaining the status of the estate. They operate as a community and the issue of security is paramount in their agenda. They also exert greater pressure on various arms of government, especially when it comes to insisting on infrastructural development.
Infact, there are several instances where they fund these projects themselves without waiting for the government. These developments combined together boost the value of property in the estate. Many investors in government schemes usually experience significant appreciation in the value of their properties in the long-term.
However, it is not all a rosy story. There are times when the government has failed to deliver on their promises to put infrastructure in place or they have failed to correct a fundamental problem in the area thus leading to stagnancy. The development can also be hampered when the government is too slow in processing or issuing the relevant title documents. This can dampen investors’ interests in the project. Recently, investors are becoming more wary of dealing with some state governments because of their track record of revoking Certificate of Occupancy or allocations due to flimsy reasons.
From the experiences of several investors, before you buy into a government scheme, go to the land bureau and request for a description of the location. Go a step further to look at the environment to be sure that it has the right factors that would spur growth and value. Consider accessibility as well as basic infrastructure. After it has been allocated to you, please ensure that you read the fine print to be sure that you do not run afoul of the condition of your allocation. In most cases, an annual fee must be paid to the government.
While the government may appear silent when it comes to non-compliance with the condition of the allocation, it is wise for the investor not to take any chances since it could lead to the loss of your investment. As a further precautionary measure, it is smart to build on the land after securing an approved building plan. The good thing is that the government usually does not act irrationally and will notify you of any infraction before imposing a penalty.