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Understanding Short-Let Apartment

• Posted by Opeyemi Quadri in Tenancy
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Investing in short-let apartments is a big deal for a real estate investor who perfectly understands that everyone can’t buy a home. Some travellers want maximum comfort and a place they can actually call home outside their homes.

And those who are yet to give short let investment a try are now interested in diversifying their real estate portfolio.

No wonder short-term apartment is rapidly growing in cities like Lagos and Abuja. Short-let is found elsewhere around the world where investing in homes is a serious business.

What is a short-let apartment?

A short-let apartment is a home built for commercial purposes whereby travellers, businessmen and women, and fun-lovers who wish to have 100% privacy in an apartment for a certain period of time.

In Nigeria, especially in Ikoyi, Victoria Island, Lekki, and Ajah, all in the commercial city of Lagos, it’s popularly known as a short-let apartment.

In the United Kingdom, it is known as a short-term, Corporate Apartment letting, or short tenancy. In the United States and Canada, it’s commonly known as a short-term rental.

Your short-term tenant could stay in the apartment for two days, a week, or a month, depending on the comfort your apartment is offering and the financial capability of the lodger.

How short-term apartment operates

The owner or manager of the such apartment makes provision for utilities like interrupted power supply, television, internet connection, steady and portable water, security and in some cases swimming pool, and other facilities that ensure the maximum comfortability of the lodger.

It became popular in Lagos a few years ago because some hotels could not meet the demand of customers. It’s lucrative and it’s easy for short let investors to calculate their return in a short period of time.

In Lagos for instance, where there the number of apartments is insufficient for people, there were people who started letting their one-bedroom apartment to someone who comes to the city for business or who have a shorter duration of stay. That created a market opportunity for smart real estate investors.

Today, the short-let apartment is a big business in exclusive and first-tier locations in commercial Nigeria’s city of Lagos like Ikoyi, Victoria Island, Lekki Phase 1, Ikeja, and Ajah among other top-notch locations in the city.

Remember, Lagos is the backbone of Nigeria’s economy. The city welcomes hundreds of people from across the world every day. Travellers need an exquisite apartment to stay in where their security and privacy will be guaranteed.

Reasons Short Let Apartment Is Booming in Nigeria

If you are wondering why short-term tenancy is growing in the hospitality industry, then you need to dig deeper to unravel what makes an investment, in short, let a great one. Below are some of the reasons it is booming

More space:

You know how it feels when you have to yourself an apartment where you decide what to do and what not to do. I mean when you have the space all to yourself, though there are some factors that influence short-term tenancy business.

More freedom:

Usually in a hotel where you don’t have access to a refrigerator when you have to call or go to the bar to place an order, where you can’t keep an unfinished drink cool. Short letting beats all these limitations, with your fridge or even freezer when it’s a 2-bedroom or a 3-bedroom apartment designed for a family, all the facilities are provided.

With this, you can decide to remain indoors for days, weeks or months, depending on the number of days you booked. There is freedom for the customers.

Travellers/Diaspora Effect

Hundreds of travellers around the world are beginning to appreciate serviced apartments than the usual hotel that has dominated the hospitality industry for centuries. These people are driving the demand for it.

Nigerians living in the UK, the U.S., Canada, Australia and other countries around the world are also driving the demand for short let market in Lagos, Nigeria.

According to a statement by the National Commission for Refugees, Migrants and Internally Displaced Persons (NCFRMI), in 2017, at least 17 million of Nigerians are in the diaspora, reported Guardian.ng.

When do most of them lodge when they first land in Lagos?

Because of the rising insecurity and family problems, and other issues they prefer to sort out without comprising their privacy opting for short-serviced apartments in Lekki and Victoria Island and other top choices in Lagos.

No wonder the demand peak during holidays, especially during Christmas and “record lower levels in off-peak seasons such as between March and July.”

Return on Investment

For the investors, it’s a great business sure of Return on Investment. For instance, 1 bed short let apartment in Ikoyi goes for an average of NGN70,000 per night, a bed apartment is NGN60,000 (on average) at Victoria Island, according to Estate Intel in its August 2022 report.

More Privacy

So you’ve got some corporate files to treat without any disturbance? A serviced apartment provides this luxury. Unless you requested a service, no one comes knocking at your door. You can decide to stock your kitchen with consumables that can take you through your stay.

Recap:

If investing in short let is an option you want to consider, pay attention to red flags and avoid the costly mistakes in real estate some newcomers in the sector made in the past.