In this article, I will show how to start a short-let business in Nigeria and earn six figures monthly in passive income.
Short-lets are profitable real estate investments that many Nigerian investors are beginning to explore. Short-lets have recently grown in popularity in Nigeria as real estate investors have become more aware of their profit and benefit.
The not-so-popular short-term rental apartment business model took advantage of the COVID-19 lockdown when most hotels were out of business and were forced to close their doors.
In the wake of the lockdown, people became more aware of being in crowded places. These properties became the norm instead of paying high hotel fees since short-let apartments are usually furnished.
So, how can you take advantage of this booming business model in 2022?
Let’s dive right in.
What are short-let apartments?
A short-let apartment is a furnished home rented out for brief periods. It may be rented out from a few weeks to a few months. Bills are typically included in the rent for short-term rental apartments.
Any property rented out for a limited time is considered a Short-let apartment. As the name suggests, it is typically released for a brief period, ranging from weeks to months. Self-contained rooms, flats with two or three bedrooms, bungalows, and duplexes might be added.
The short-let apartment, which was created as an alternative to hotels, is now a popular option for housing, especially for visitors, tourists, and travellers to Nigeria.
How profitable is a short-let business in Nigeria?
The short-let business model is a very profitable business to run in Nigeria.
The amount of money one may make from owning a short-let business is limitless; for example, a three-bedroom duplex may bring in as much as N150,000 each day, which is conservative.
As long as your apartment is well furnished and established at a good location, you should be getting patronage and making money consistently.
Here are some benefits of Short-let business:
When renting a short-term flat, you can pick the time to rent, check in, and check out. The property can be rented out for whatever price you like.
Additionally, you can stay in your apartment or earn income from it while you are away.
You can also set the length of each resident’s stay, thereby managing income and tenancy.
2. Gains from Property Value Increase:
The value of a property can increase dramatically for years even if there are no changes to the property due to changing local demand, which results in a significant gain over time.
3. Effort Equity:
This involves repainting the house, installing new siding, finishing the interior, and performing some simple yard landscaping. It will increase the value of the home without incurring significant financial outlay. In addition to enabling higher rent rates, this will also raise the property’s worth if the investor decides to sell it in the future.
4. Increasing Rental Income:
Making extra money is one of the significant benefits of investing in a short-let business.
For instance, it’s been reported that short-let apartment owners on Airbnb make an average of more than $900 every month.
Investing in a short-let business allows you to choose the rate following demand and the season to maximise rental income.
5. Social Advantages:
Investing in a short-let business in Nigeria can introduce you to fascinating individuals and encourage social interaction. As previously said, short-term accommodation typically draws temporary guests on vacation or travelling for business.
When you open a Short-let business, you meet most travellers with whom you can network, connect with other clients, and possibly even make lifelong friends or acquaintances.
How to start a short-let business
Having learned the benefits of starting a short-let business, let’s quickly learn how you can start your own short-let business with ease.
Determine the best location for your short-let business
The very first step in starting a short-let business is getting a good location for the business.
Cities like Lagos, Abuja, and PortHarcourt are prime cities for setting up a short-let business. However, if you do not reside in those locations, you should choose a location in your place of residence that has an excellent economic drive. This means setting up your business in central and busy areas.
This makes it possible for you to get people to patronage your business quickly compared to less urban areas.
Determine the apartment type
After determining the ideal location for your short-let business, the next step is to determine the type of short-let apartment you want to set up.
You can use a bungalow, duplex, studio apartments, or storey buildings for your short-let business.
It depends entirely on you and your budget. Setting up a studio apartment for your short-let business will cost less than a duplex.
You can as well set up different apartment types for your short-let business.
Choose your short let business model.
To succeed as a short letter, you need to have your business model dialled in. Let’s run through some of the business models available to you.
Build/buy an apartment for a short-let
You may consider purchasing or building an apartment for a short-let business, which is a great idea.
This is because you have complete control of the business compared to renting an apartment and setting it up for a short-let business.
The drawback here is that it requires enormous capital to start. You need to build the apartment yourself and ensure it’s well furnished.
On the other hand, you can decide to buy a property and use it for your short-let business. It bores down to personal choice.
Rent an apartment and use it for a short let
You might need to consider the legal requirements and implications if you intend to short-term rent out your house.
Short-term rental is classified as less than six months, but many landlords regularly negotiate arrangements for as little as one week.
Short-term rentals will be approached differently than long-term, starting with how they are advertised and ending with the tenant’s expectations.
You can’t expect tenants in short-term rentals to move in with all their furniture or set up the bills in their name when it’s only for a few days or a week. This is why you’ll want to rent your home completely furnished, with all the essentials—including beds, sofas, tables, and white goods—provided in each room.
It must also have a homey appearance, incorporating soft furnishings like pillows, duvets, and additional sets of bed linen, as well as a few household necessities like an ironing board and vacuum cleaner.
Long lease an apartment for a short-let
A long-term rental is a practical approach to generating dependable, positive cash flow.
It has several advantages, and when you know how to get started, it can provide a more steady source of revenue than short-term rentals.
It is common for a long-term renter to occupy a rental property for an extended period. Depending on the landlord or the property management firm, this could be anywhere from 30 days and six months (or more).
Long-term rentals are available with or without furnishings and can be used for travel, job relocation, or by persons between houses.
A long-term rental might offer its residents immediate relaxation compared to a short-term home. When something unexpected happens, it might fill in the gaps and provide a sense of “home away from home.”
Long-term rentals typically mean less churn, greater consistency, and fewer hassles.
Furnish your apartment
The next step after getting an apartment to short-let is to furnish the apartment. Let’s examine a few ways you can furnish your short-let apartment without breaking the bank.
Furniture is the first and most crucial element to be considered while furnishing an apartment. Analyse the space that needs to be filled before acquiring any furniture. Your goal should be to choose furniture that takes up less room and is more functional.
The second thing to consider is the potential uses for each room. For instance, a room adjacent to your kitchen would be ideal for a living room or media room.
A bed is one of the essential human needs, and you cannot disregard it! Without it, home or apartment lacks something. However, there are specific techniques to get the most out of your bed.
It would be reasonable to purchase a convertible bed if your space is limited. Several options on the market provide you with a selection of foldable beds.
The good news is that adequate lighting doesn’t have to be incredibly expensive and can alter the dynamics of a place. What factors should you consider when lighting? Rooms should be well-lit, but you should include dimmers in switches to accommodate various needs.
- Free Wifi
The delight of having free Wi-Fi is unparalleled. Giving this joy to those renting the investment property is a huge benefit. It won’t be too expensive, and the public will benefit. These actions guarantee guests will keep renting your holiday home.
Market/publicise your short-let business.
This is the most important aspect of setting up a short-let business. Without patronage, you have no business. To make this post exhaustive, I will show you how to publicize your new short-let business with almost zero naira in advertising. Are you ready?
This is an African e-commerce platform that matches shoppers and vendors for free. Jiji has become increasingly popular for real estate marketers.
This means you can also post your apartment on Jiji and get people to reach out to you for rent.
Getting started is easy. Simply create a free account and list your properties under the property category.
You can boost your listings for a small fee to get more reach and visibility.
The business model of Airbnb is both unique and straightforward. There is no fee for listing your home on the site, which allows you to define the type of lodging you provide and the available days. On each rental, the company earns money by charging fees to both guests and hosts.
Short-term rentals have become increasingly popular because of Airbnb.
A large portion of the back-office work, such as reservations, marketing, tax collection and remittance, and other tasks, are handled by the platform, making it simple for guests to select properties based on their preferences. Start with Airbnb if you haven’t already.
A real estate and property website in Nigeria called Nigeria Property Centre features listings for homes for sale, rent, and lease.
Nigerian Property Centre (NPC) is the country’s top real estate marketplace for buyers, sellers, renters, and agents. NPC makes it simple for tenants and purchasers of real estate like short-let apartments to locate the best online offerings. The site has thousands of visitors per month. Listing your properties on their website can get you, tenants.
PropertyPro.ng is Nigeria’s most popular platform for real estate property centres. By linking consumers with legitimate and verified real estate agents through web-based property rentals and sales platforms, PropertyPro offers one of the most significant property search experiences online and offline.
PropertyPro.ng provides access to over 60,000 property listings on the Nigerian real estate market for small, medium, and large-scale real estate companies that would like to increase sales and rentals of their properties. These listings include homes, houses, lands, shops, offices, and other commercial buildings.
This site offers an excellent opportunity to get tenants for your short-let business.
PrivateProperty.com.ng – another online listing property in Nigeria, will link you with individuals interested in patronising you. Signing up on the platform is easy. Simply create an account and list your properties.
Social media marketing
More than 80% of consumers say that social media, particularly influencer content, significantly impacts their purchasing decisions. As a result, marketers from various industries are advancing social media marketing (SMM) from a single tool to a multifaceted source of marketing intelligence for a growing and influential audience.
You miss out on potential juicy deals if you aren’t using social media platforms to advertise your short-let business.
There are various ways to advertise on social media platforms:
- Sponsored posts
- Influencer posts/videos
- Consistently posting content about your short-let business on your social media pages.
A short-let business is a business model that makes you millions every month if done well.
In this post, I’ve shown you how to start a short-let business. It’s left for you to take action by starting.
So, when you are starting your short-let business, let me know in the comments below.
If you are looking for other alternative means to make passive income, check out this post on ten online businesses you should start in Nigeria.