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Hidden Charges

Buy Now Pay Later: The Truth About Hidden Charges

This is the third and final part of the ‘BUY NOW PAY LATER’. In this final part of the real estate investment series I will be giving answers to frequently asked real estate investment questions.

The first thing area I will be looking into is the question of ‘How long it takes for a BUY NOW PAY LATER investment to mature and begin to yield returns’.

Ideally, patience is key. I usually tell my clients that it takes up to seven to ten years. It is why the BUY NOW PAY LATER scheme seem to be ideal for such investment. This is made possible because by the time you finish paying for the land, it would have appreciated enough for returns.

BUY NOW PAY LATER deal is a long term investment, and it also depends on what the developer is offering. A sight and service scheme usually takes longer. The gestation period is longer than a housing unit scheme. Ultimately, investment in this deal is not for quick returns.

The next issue I will address is the issue of Hidden Charges. A lot of people ask the question about hidden charges, and usually get angry when this issues come up.

While it may be true that some developers do not disclose hidden charges initially, it is also not all developers who do that. There is a human nature aspect of this. Actually, it is possible that the developer did not hide this charges, instead you were either ignorant of the ‘other charges’ or you were ill-informed by the marketer. But it is in your own interest to ask these questions right from the beginning.

In a proper sight and service scheme transaction, you make payment in four ways. The clearer these things are, the better for any developer. This is because if the payments are delayed, the development of the estate will be delayed.

In sight and service scheme, you pay for the plot first. You must then do the documentation; in sight and service, documentation normally includes legal and survey. Thirdly, you pay for infrastructure, and lastly, you pay for service and maintenance.

What I have discovered in the industry is that buyers wish that you never ask them to pay for the last two. But truth be told, if the last two are not addressed, you may just be on a wild goose chase. This is because the investment is at risk if those two aren’t paid. The payments are in the subscribers’ interest that these things get sorted out clearly.

Hence, when you are buying, ask thoroughly where and when these payments become necessary. If the developer doesn’t even plans for infrastructure and maintenance it means there is a question about his expertise.
The last two payments are what determines if the landed investment remains a bush forever or it develops into a livable and returns-yielding environment.

People usually want to evade these but they end up having to understand that they have to pay for documentation, due to the fact that it comes immediately after paying for the plot. There is no gainsaying that the last two payments are quite important  to the success of your investment.

There are no hidden charges, In fact there shouldn’t be, but there are ‘important charges’ which will determine the success of your investment.


Debo Adejana

MD/CEO, Realty Point Limited

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