Over the last few years, there has been a growing demand for short-let properties in Nigeria. This increased demand is particularly due to the prevalence of business activities, conferences, tourism, and general travel within Nigeria.
A lot of people desire to feel at home while they are away from home, and a short-let property certainly gives them this feeling.
Short letting investment in Nigeria is hence, a very lucrative investment that is sure to yield profitable returns. If you are weighing the options on where to plunge your money for investment, this article will show you eight reasons to consider short-let property investment in Nigeria.
What is a Short Let Property?
Before delving into the reasons to consider short-let property investment in Nigeria, it is important to explain what short let apartment is.
A short-let property or a short-term rental apartment refers to a well-furnished apartment that is given out for rent for a short period often ranging between a week to some months. A short-let property comes in a variety of sizes and should contain everything found in a regular house including a kitchen. They mostly include self-contained apartments, one-bedroom apartments, two-bedroom apartments, bungalows, and duplexes.
Why Should You Consider Short-Let Property Investments in Nigeria?
- Greater Earning Potential
- Compared to yearly rental arrangements which generate income once a year, short-let properties would provide you with consistent and higher earnings. With a short-term property investment, you could earn huge sums every day depending on the capacity and demand of your property. Most short let property owners in Nigeria charge renters according to the days spent inside the property. More intriguing is the fact that you can charge between ₦80,000 – ₦120,000 per day for a 2 bedroom fully-furnished apartment. If you do the math, you could earn up to ₦1,000,000 if your property is occupied for only ten days within a month. This is quite a realistic projection, and earnings could be more, depending on demand and season.
- Property Value Appreciation
- It is a well-known fact that lands and properties are assets to their owners. One remarkable advantage of short-let property investment in Nigeria is that over the years, your property has a greater tendency of increasing in value. Even with little or no renovations to the property, it cannot be priced at the same amount in ten or twenty years to come. The financial value will increase. So after enjoying the rental dividends on a weekly or monthly basis, if you decide to sell off your short-let property in a few years, you can still sell it at a higher price than you acquired it. This makes short-let property investment in Nigeria a good one because of the value appreciation.
- Short-let property investment in Nigeria would offer you more flexibility in several ways. As a short-let property owner, you can adjust your rental price based on demand, seasons, or special events within the locality. This gives you enough freedom and versatility to maximize your income. Once there is high demand for your property, you can increase the price so that the highest bidder will get to stay in your property. The same thing applies during seasonal periods and other special occasions. With a short-term property investment, you can also adjust your marketing strategy from time to time and offer promotions to increase your revenue. You are at liberty to choose the demographics of people you want on your property, as well as decide the duration of their stay.
- A short-let property in Nigeria allows you to diversify your investment and creates a new income stream for you. Instead of carrying out only the traditional investment in stocks and bonds, you could add a short-term property investment to your portfolio of investments to minimize the risks. Diversifying your investment will also give you long-term stability, access to different opportunities, and higher returns on investment.
- Leverage on Tax and Loans.
- One of the perks of owning a short-term property investment in Nigeria is that it gives you some leverage on tax and bank loans. You are at will to use your property as collateral to get a loan for business purposes or other investments. A short-let property investment will also enable you to save on taxes and build wealth for yourself. Often, short-let property owners are granted favorable tax treatments as long as certain conditions are met. So, with the right tax planning strategy, your tax will be drastically reduced.
- Personal Use
- Short-let property investment in Nigeria allows property owners to utilize their properties whenever they wish to. Anytime your property is vacant or unbooked, you can enjoy the ambiance of the place all by yourself. You can also choose to host your family members and friends in that apartment. Another reason to consider short-term investment in Nigeria is the fact that it gives you the freedom to carry out maintenance and renovations whenever you please without disrupting long-term tenants.
- Sweat Equity
- As a short-let property owner, when you renovate or repair facilities in your house, you are investing in sweat equity. So when you are repainting, landscaping, or remodeling your bathroom, kitchen, or garage, you are invariably adding value to your property and increasing its market value. This will therefore allow you to charge more for rent, and if you decide to sell off your property, you can do so at a higher price.
- Steady Cash Flow
- One of the reasons to consider a short-term property investment in Nigeria is that it offers a steady cash flow. You could earn daily, weekly, or monthly depending on your arrangement with the client. However, the cash flow in a short let property investment is regular and consistent. Since a lot of business owners and individuals travel for business purposes and relaxation respectively, short-let properties will continue to be in demand. This is because it does not only give them the privacy they want, but it also offers them the same comfort and freedom they enjoy in a normal house. So, as long as people keep booking short-lived properties, your income will be steady.
Investing in short-let properties offers a promising avenue to multiply your streams of income. Short letting have become a viable alternative to hotels because they offer more privacy and comfort just like a regular house. Owning a short-let property in Nigeria will offer you a higher income, flexibility, diversification, property value appreciation, leverage on tax, sweat equity, and steady cash flow. So, if you are looking for a worthy investment that will yield substantial returns, you should consider a short-let property investment in Nigeria.