SHORLET APARTMENT TAKING OVER REAL ESTATE IN NIGERIA
Short-term rentals are becoming increasingly popular. This is due to its affordability, aesthetics, comfort, and the services it provides. Most vacationing families rent short-term apartments for the duration of their stay. Friends and colleagues use these apartments to host social gatherings such as birthday parties, house parties, weekend getaways, and so on. Some corporations also use short-term apartments to house their employees when they attend conferences, seminars, workshops, and company retreats. You will agree with me that there is a good market for short-term rentals, and how you position yourself is entirely up to you. It is posing a threat to hotel businesses because many people would rather pay a hundred thousand naira per night for a short-let apartment than pay the same amount for a night in a five-star hotel. This can be attributed to the homey feeling that short-term apartments provide when compared to hotels.
Last year, the hospitality industry took a significant hit as a result of COVID-19, which resulted in low hotel patronage around the world. Individuals who were in another country when the lockdown occurred had to find short-term housing because airlines were not operating and travel was restricted. Owning an apartment or house for short-term rental purposes can be capital intensive, which is relative, but the returns are enticing. A three-bedroom serviced apartment on the Island of Lagos, for example, costs around 80,000 Naira per day. The most expensive option costs 200,000 Naira per day, while the cheapest option costs 40,000 Naira per day. You can imagine what the monthly cash flow would be like for an experienced investor who has such a property in his portfolio for this purpose. Although there will be dry days, it may not rain for the entire thirty days of the month.
Taking an average of at least three bookings per week, one can be certain of receiving $960,000 per month. If there is a month with four to five days booked per week, one will be smiling at over a million naira cash-flow per month. Keep in mind that the location is critical when considering this type of investment model. You must be strategic in your approach. Conduct research to determine the major drivers, activities, and attractions that attract customers (people). Key drivers that ensure patronage of your short-let apartment include beach resorts, carnivals, stadiums, and concerts. As a result, purchasing an apartment in such areas with these landmarks or activities tends to keep your investment profitable.
Advantages of Investing in Short Let Apartments.
1. High income potential—The most significant benefit of owning a rental property is that the renters provide a direct income stream. There is no limit to how much money one can earn from owning a short-let home; depending on the season and time of the year, a three-bedroom duplex can fetch the owner as high as N150,000/ day, and that is being modest.
2. Income from property value growth—There is a massive gain from an increase in the property value over time due to changing demands in the area; even if the property does not undergo any changes, the value may rise significantly over a few years.
3. Flexibility in short let tenancy—Since it is a short let apartment, the owner reserves the right to dictate the duration of stay for each occupant, thereby controlling income and tenancy.
4. Leverage—Like every other property, a short let home offers the owner leverage on tax and bank loans. Investors can still use their home as collateral to get a loan for business or investments.