How Do You Make Money on a REIT in Nigeria? (A Step-by-Step Guide)
Learn how to make money from a REIT in Nigeria — buy units, get dividend income, benefit from value growth, and plan your exit.
Valentine Okoye
2/16/20264 min read
If you’re thinking of investing in REITs (Real Estate Investment Trusts), it’s super important to know exactly how you make money from them.
In this article, you’ll learn the simple, practical steps to earn from REITs, with relatable examples and tips.
How to make money on a REIT in 5 steps
Below are 5 steps to make money from REITs:
Buy REIT units.
Receive dividends.
Benefit from capital appreciation.
Reinvest your dividends.
Plan your exit.
Step 1. Buy REIT units.
This means owning a piece of real estate.
First, you need to invest by buying units (shares) of a REIT, usually through your stockbroker on the Nigerian Exchange (NGX). When you own REIT units, you effectively own a slice of the properties in that trust or company.
The properties can be shops, offices, or even residential buildings.
Example:
Instead of trying to save N5 million to buy a building, you can buy REIT units worth N200,000 or less and still benefit from the income and value growth of that same building.
See: How to buy REIT units step by step.
Step 2. Receive dividends.
Dividends are your share of income from rent.
Most REITs make money by renting out their properties. After paying expenses (maintenance, management, taxes), they share a large portion of their profit (90-95%) with unitholders as dividends.
Nigerian REITs like UPDC REIT pay dividends twice a year.
Example:
In June 2025, UPDC REIT announced an interim dividend of N0.22 per unit. So, if you own 500,000 units of a REIT, and it pays N0.22 per unit, you’ll get N110,000 for the first half of the year.
See: How to invest in Nigerian REITs.
Subscribe to our newsletter
Get the latest updates and deals available only to subscribers.
Step 3. Benefit from capital appreciation.
If the properties under a trust become more valuable or the REIT performs well, the value of the REIT units can go up. This gives you capital gains when you sell your units.
Example:
UPDC REIT’s 2023 annual report shows that its unit price jumped from N3.00 in 2022 to N6.40 in 2023.
This is an impressive 113.33% increase in a single year. The doubling of the unit price shows you can benefit from a REIT's capital appreciation.
Step 4. Reinvest your dividends.
This step is optional. However, it can provide compound growth for your investment.
So, if you receive your dividends and don’t need the cash, the best move is to reinvest them in buying more REIT units.
Over time, that can compound your returns. Owning more REIT units means more future dividend income and growth.
Step 5. Plan your exit.
An investment exit is how you take your profits. Planning your exit from a REIT investment is just as important as choosing the REIT itself.
The question here is, when do you sell your units and take the profits?
Some investors set a target dividend yield (e.g., 8–10%) and exit if the REIT drops below that.
But here are some REIT exit strategies:
Selling your units on the NGX once you reach your profit goal or need the money
Exiting right after receiving your dividends, especially if the payments are dropping
Rebalancing your portfolio or selling part of your REIT units to reduce risk
Exiting during major market shifts, like rising interest rates or falling occupancy.
Example:
If you bought UPDC REIT and its dividend yield falls because its unit price has gone up, you might decide to sell some units and take a profit.
The choice of exit strategy depends highly on:
The type of REIT (equity, mortgage, or hybrid)
Your investment horizon
Market conditions, and
Your specific financial goals.
It helps to have an exit strategy. Without one, you might never maximize returns and minimize potential risks.
See: What is the best REIT exit strategy?
Bottom line
Making money from a REIT involves buying the units, earning dividends, and benefiting from price gains. You can reinvest dividends to grow faster, but always watch the risks, stay patient, and decide when to take profits or exit.
FAQs on making money from REITs
1. Do REITs pay monthly dividends?
No, REITs don’t pay monthly dividends.
REITs pay dividends on a schedule set by the trust (quarterly, semi-annually, or annually). In Nigeria, they often pay semi-annually or annually. So, it’s important to check the specific REIT’s policy before investing.
2. Can REITs be traded on an exchange?
Yes, you can trade REITs on an exchange. In Nigeria, they’re listed on the Nigerian Exchange (NGX), so you can buy and sell units just like regular company stocks.
3. Are REITs riskier than stocks?
Not necessarily. REITs can be less volatile than many stocks because they’re backed by real estate, but they still carry risks like vacancy and interest rate changes. So, it really depends on the specific REIT or stock you’re comparing.
4. Do REITs have high liquidity?
It depends on the market. Globally, many REITs are highly liquid. But in Nigeria, liquidity is lower because trading volumes on the NGX are still small. You can sell your units, but it may take longer.
5. What is the 90% REIT rule?
The 90% REIT rule means that a REIT must pay at least 90% of its taxable income as dividends to unitholders. This is to ensure that investors get regular income from rental profits.
Start building real wealth over time with Arkey Real Estate Limited.
Subscribe to our email list to get a template of a simple Co-Ownership MOU (Memorandum of Understanding).