Saving for a house project

2011-03-20
THE PUNCH Newspaper- Rasheed Bisiriyu

House rents in major cities of Nigeria have been increased substantially in the last two decades. Those who live in Lagos, Abuja and Port Harcourt, for instance, have to be prepared for about 100 per cent increase every time their rents expire, it does not matter whether the houses are ancient or dilapidated.



It, therefore, makes a lot of sense for one to begin to plan for one’s house immediately one moves into a rented apartment.



In developed nations and emerging economies, homeownership is mostly achieved through well-structured mortgage schemes. And the systems are so predictably simple that interested people only use the services of professionals as a formal requirement.



Average Nigerian workers interested in homeownership will ordinarily have latched on the nation’s mortgage system, but the National Housing Fund, which was established to facilitate that, has almost become moribund scheme.



Investigations have shown that less than five per cent of those who applied for housing loans to the Federal Mortgage Bank of Nigeria through the mortgage firms every year get a positive response.



“Unless a person is very well off, it is inevitable that sacrifices will have to be made when it comes to saving up for a home,” an expert, writing on the issue under Suite101.com, says. He, however, adds, “This does not have to mean giving up everything that is enjoyable and leading an unexciting life. Small lifestyle changes, such as taking a list to the supermarket, taking up running instead of paying for a gym membership and cooking meals at home instead of dining out will all help boost house savings.”



Although the harsh economic situation may make it difficult for young people to get a foot onto the property ladder, experts urge people not to despair as they offer a number of strategies to actualise their dreams.



They note that despite high cost of building materials, aspiring homeowners can still build their own houses, if a reasonable savings plan is adopted.



Surprisingly, many who engage in saving for the construction of their own houses have found it exciting. They say it may take some time to save the substantial amount needed to buy enough blocks, required bags of cement with other materials as well as pay the bricklayers/builders, plasterer, carpenter, electrician and painter.



And while saving for the house, you still have other regular bills to settle, such as rent, electricity and fuel for your car. But it is certainly possible to save for the building one put one’s mind to it. And the trouble is undoubtedly worth the while.



In specific terms, one of the experts, Mr. Lawal Owonifari, who is the managing director, Lonerax Nigeria Limited, a property development firm, stresses the need to keep track of exactly what is being spent in order to cut back on unnecessary expenses.



Some people have advised those who desire to own their houses within a reasonable period of time to open a bank account where a certain percentage of their monthly income is set aside and saved. You may keep all documents required for any withdrawal with a trusted friend or relation.



But if you are not comfortable with that arrangement, you can open a premium savings account with an insurance firm, which will only mature after saving enough to build or buy a good house.



An online news portal, ehow.com, says there is no point putting your house savings in a current account, where the money will never accumulate any interest.







A former Chairman, Nigerian Institute of Architects, Mr. Ehi Ben-Eboh, says for those on irregular income, they can set aside about 50 per cent of their profit for the house project each time they execute any paid assignment or job.



Another property expert, Mr. Muhammed Shuaib, urges prospective homeowner to deposit money either directly or through the bank account of a trustworthy cement dealer/retailer or block seller until it is enough to buy what is needed to start, continue or complete the house project.



He says, “The first thing is to raise money to buy a plot of land for the project. Adequate care must be taken not to fall into the hands of dubious land speculators. Make private investigation before committing money into it. Find out from people the kind of people selling the land and the genuineness of the land to be sold.



“Collect the necessary documents and verify them well before making final payment. It is advisable to involve a good lawyer if you do not really know how to go about it or you doubt the integrity of the people.



“Once the land issue is settled, you can approach a reasonable builder to give you an idea of how much is required to build the house you desire.”



Muhammed also says intending a homeowner can also begin to moblise workers to the construction site once he has a little amount than can get the project going. “You don’t have to wait until you have any bulk money. As soon as you have any amount that can do any little thing there, get going, within a short time, the house will be ready.



He insists that this is the time to eliminate luxury items such as a new car or a vacation until you have completed the project.



Many spend a lot of money on ceremonies such naming, burial, birthday, Christmas, the Eid-el annual Muslim festivals and other end of the year activities. Experts say you budget and spending rate on these activities will have to be moderated. You may be criticized for cutting back on them, do not mind them. You have a target and once you achieve that goal, they will the first to praise you. You will easily become their reference among the wise people.



You are also advised to check around, even online or your bank for information about the home ownership schemes.










 

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