When people visit a city for the first time—whether on a vacation or for business –they typically make a hotel room their abode for the duration of that visit. But hotels seldom give occupants a homely feeling. And not everyone likes this.
In fact, there’s enough dissatisfaction with the hotel experience a global demand has arisen for apartments that travellers can live in for a short period. This demand hasn’t gone unnoticed. A growing number of real estate investors are meeting the need for short–let living spaces.
The short–let business involves renting out apartments for brief periods, usually for a few weeks or months. The spaces may be self-contained rooms, flats, bungalows, or duplexes. In most cases, they are furnished with the items you’d find in a contemporary home: furniture, lighting, entertainment systems, and internet access.
The Benefits Of Running A Short Let Business
The single greatest benefit you’ll reap from running a short-let business is the profit you’ll make from it. You could earn six figures(in naira) daily—several times more than you’ll get for a normal, average rental property. Of course, your success in this area will partly depend on the location of your apartment and how well-furnished it is.
Short-letting leaves a lot of power in your hands. You can offer your space to tenants whenever you like, and set the duration of their stay beforehand. Many earn passive income from this business. They are able to do this because they have the property on platforms which manage it on their behalf.
The value of your short-let apartment could also increase substantially over time. This could happen if demand for the property (and others in the same area) continues to rise. Value appreciation may happen even if you haven’t made improvements to your house.
Steps To Setting A Short Let Business In Nigeria
Here are the steps you can take to start a short–let business in Nigeria.
Decide On A Location For Your Apartment(s)
This is the first thing you should do; it could determine the success of your business. Ideally, you’ll want your space to be located in a major city—say Lagos, Abuja, or Port Harcourt.
It should be in a district that’s developed, has good infrastructure and utilities, and is likely to attract the kind of people who will want a short let apartment (tourists and businesspeople, for instance).
Choose Your Preferred Apartment Type
There’s a whole range of building types you can choose from: bungalows, duplexes, villas, etc. Just be sure that it’s something potential occupants will like to live in. Flats have been a fairly popular option for early investors in Nigeria’s short-let niche. But it’s up to you to select one that fits your intended business model.
Before settling for an apartment type, be sure to weigh things like the capital you’d require to build, purchase, or rent them, and the time it’d take for you to recoup your investments (if this matters to you). Also, find out what’s popular with occupants, so you’ll offer them something they’d like.
Adopt A Viable Business Model
Just as is the case with building types, you have multiple business models to choose from. You may buy the property you intend to rent out or build it from scratch. Or you may rent spaces and sublet them to tenants. There’s no objectively good or bad option here. It just depends on what your aims, risk appetite, and attachment to ownership are.
Building a house may be relatively expensive; so would be buying it, compared to renting spaces. But if you own your house, you’ll have a greater say over when the property is available for rent, and get a higher share of the revenue that it generates.
Provide Home FurnishingsAnd Utilities
The home you’ll be renting out needs to have its furnishings in place. This includes furniture, fittings, and decorative accessories. Be sure that these items match and improve the overall aesthetic of the apartment’s interior, and can provide comfort for occupants.
Also get power, water sources, internet access (WiFi), entertainment systems, and other electronics in order. With these fixed, you’ll have a home that’s ready for tenants to fill.
Get The Word Out
Your next step should be to market your living space(s) to potential residents. These days, you can get the word out on the internet. It’s a smart bet: you’ll reach a lot more people online than you would if you tried to market on the streets. Plus, it’s much cheaper and could get you better results.
You will want to publicize your short-let apartments on sites like Airbnb (the world’s most popular platform for short-lets), or on local online marketplaces. Provide all the necessary information about your property in the listings, and include well-taken photographs of it. Anyone who’s interested in what you’re offering will contact you via the platform(s) on which you have listed your house.
The short-let business is still in its infancy in Nigeria. It has a lot of room for growth, so new entrants are almost guaranteed success if they play their cards right. Follow the steps we’ve shared here to start a business in this niche that wins big.Featured Image Source: The Conference News
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