Owing to the high cost of procuring a land and securing a building in Lagos state in particular, it has become imperative for prospective land lords to know what letting their houses out really entails and the risk they run. This write-up isn’t supposed to scare off any prospective landlord, but rather prepare them and further enlighten them about the dangers and the investment prospects of actually having a house/property to let.
1. Screen Tenants properly[/i]: Most landlords make the mistake and always take tenants who are the highest bidders and therefore any tenant who can pay the prescribed fees and claim to adhere to the terms and conditions of the landlord at the time, is actually good enough for them…well my experience as an estate surveyor and valuer has shown this tactics to be very defective, in fact it’s one of the fastest way to start reducing the returns from your hard earned investments.


ILLUSTRATION 101[i]: As a young surveyor back in the days when I used to work with a real estate firm, it was the usual practice to investigate our prospective tenants before we even considered their applications for the properties we managed, but this time around this client stood out, he came in a branded company car of one of the very popular top companies around (name withheld)he was well dressed and his spoken English was soft and polished, even his driver from the look of things was actually good enough to take the apartment, he told us that his reason for relocating was that he lived in a not too secure area, where robberies were the norm. Without giving it a careful thought we just gave him the details of how he should go about the payments for the property, and by the time we sent the tenants profile to the landlord, he was over joyed. Weeks soon passed by, and one day while at work; we (team of young surveyors) were passing by the office of our supposed client, and being the youngest of the surveyors in the company at the time we decided to drop by his office to greet him, hoping some change could drop(naija things). On inquiry we dropped his business card with the secretary in the waiting room and told her who we were there to see, she looked at us with a strange glance, she placed a call and was barely audible in her conversation. In no distant time we were surrounded by security men from that company and we did a lot of explaining, shortly after we were handed over to the police because they claimed that we had gone to forge the business card with their company logo and details; luckily in the police station there was this very nice and understanding D.P.O (woman) she heard us out and even gave us police escorts to assist us in going to apprehend our supposed tenant.
The summary of the whole incident was the fact that the supposed tenant was a 419er who the police had been trying to track for a while now…he disguises himself as a decent man and moves to high borough areas, familiarizes himself with the people there and meets with the rich landlords in the area, swindles them and disappears into thin air, in his compound he had all kinds of exotic cars and the house was armed to the teeth with all kinds of high tech gadgets, I can’t categorically say if he was eventually charged to court or if the police did the usual thing and let him go all I can say for sure now is that they are certainly so many of them like that out there, and its imperative for landlords to ensure they give their properties to competent hands to manage for them, and if you decide to do it yourself, don’t overlook conducting a search irrespective of who the client presents himself to be.

1.2 Find out the true reason for relocation[/i]: Many landlords are in the assumption that all tenants are relocating owing to the distance from their places of work or because of the need for more room, conducive environment or security, well my years as an estate surveyor and valuer has thought me that relocation is for more than the above stated reasons.
ILLUSTRATION 102:[i] Well the Xmas festivity had just finished and at this time of the year the demand for houses for let is usually high, owing to the fact that most people have just returned from the individual villages and because of the common naija believe that certain houses actually tie down ones progress, and also the orientation that a new year should come with new levels, there is a lot of migration, and at the time. A friend of mine was in court with of the tenants occupying his house, and finally he got a court order to eject the said lady (tenant) and he was overjoyed as the lady had been owing rent of over one half years, and they had been in court for over a year. A total of two and a half years of battle, and he was still in the rejoicing mood when the said lady walked into my office the next day, I pretended not to know her, she said she needed a house and when I asked her about her previous accommodation she lied that she had just been relocated from Abuja, and that she needed and an apartment really quickly to settle down in, apparently she had seen my advert on the internet, I respectfully told her that all my apartments in the area had been taken, and that I would get back to her if and when I find a vacant apartment that suits her requirement, a year and a half later I found out that another real estate firm had been negligent, and hadn’t really inquired deep into why she actually relocated and were in court again. They spent another 9 months in court apparently the woman has left and is still on the loose for another house, she looks so innocent, very courteous and even worse is the fact that she is a widow with two lovely boys, enough to melt anyone’s heart to consider her and give her an apartment(beware).


2. Find out what the house is really been used for[/i]: This is particularly directed to landlords who do not reside in the same areas/compound with their tenants. Many landlords who manage their properties rarely come back to visit their tenants until their rent is due, well in the evolving world of today this is now termed a bad practice and very unwise as tenants even after having passed certain tests still need to be checked upon, to ensure that nefarious activities aren’t taking place in your premises.
ILLUSTRATION 201:[i] I was driving down to Mushin, when I saw a large crowd of sympathizers all gathered, i normally wouldn’t stop for anything, how much more a Lagos crowd, they are usually recipes for trouble or pick pockets, but this particular crowd was strange because of the heavy presence of armed mopol men and vans, on inquiry I learnt that a landlord who had been managing his property himself had given his property to a banker(bank withheld) who had occupied his self-compound 3bedroom apartment for so many years until some years back; he was retrenched( bank consolidation) apparently. He had tried fruitlessly to get a job and when all efforts failed, he resulted into adulteration of food stuffs in the compound, what was moved from a mini ware house that the tenant had built makeshift in the backyard of the apartment was a large cache of tin beverage (brand withheld), and the landlord was indicted because the police was claiming that he couldn’t claim not to know about a makeshift warehouse constructed in his backyard, in the end the landlord who seemed a peace loving man had his property sealed up pending conclusions of investigations on his involvement in the matter.am sure by now everyone who is conversant with the Nigerian police force would agree with me that even after sufficient evidence of the none involvement of the landlord, the house will still be sealed until a sizeable amount of money exchanges hands; that’s bad for business, bad for your investment. They are many other silly similar stories like this but I chose to tell this one.


3. Collect caution fees:[/i] This may sound new to some but caution fees is an amount collectible by either landlord or agent as the case may be to safe guard against the mis-use of the apartment by intending or sitting tenants, this fee is refundable “if at the expiration of the tenancy the apartment’s furniture and fittings are in one piece or are status quo, else the value of the damaged fittings are deducted and the balance is refunded “please be mindful as the fees doesn’t safeguard is not deductible against normal depreciation or worn out paint. Some landlords especially in the island aren’t into this practice but it’s becoming increasingly imperative for landlords to be aware of the advantages this practice brings to light, Be warned that this practice isn’t full proof as there are extreme cases whereby this method fails as a result of the damage exceeding the refundable caution fees the landlord/agent must have collected; the good news is that at least the loss must have reduced; another reason why screening a tenant is good practice.
ILLUSTRATION 301:[i] Well this happens on a daily basis and they are so many examples, so let me refer back to illustration102, that particular woman who had almost wasted three years of my young friends tenancy, while she was leaving the house after the court order to evict her ,she entered into a frenzy of destruction, she damaged everything should could lay her hands on, from ward robes, tiles, kitchen cabinet, electric switches, and even windows, basically everything she could lay her hands on and in the end the damage was running into almost N300,000(three hundred thousand naira) more than the caution fees he collected, as he had collected the sum of N50,000(fifty thousand naira).i said earlier that the caution fees isn’t a full proof practice against damages, but at least it may safe guard against losses as most tenants would hope to retrieve their refundable deposits at the expiration of their tenancy,thereby forcing a cautious altitude.


4. Don’t over price your house[/i]: i know that by now many of the readers would be wondering how this could be a disadvantage when the sole aim of every investment is to reap returns. Well it so happens that over pricing your
house in a particular neighborhood can actually be a recipe for poor returns on investment.
ILLUSTRATION 401[i]:there is no known approved method for actually stipulating the prices of accommodation but Here is the thing, every neighborhood has a standard going price for different kinds of accommodation, this prices are most times driven by demand and supply over the years ,that is not to say for example that a 3bedroom flat going for N800,000, cannot be seating next to one going N900,000, this could be resultant of the differences in the amount of toilets and bathes in each apartment, compound space, availability of service options(security guards, cleaners, generators etc.),quality of finishing(marble floor, pop ceilings, Jacuzzi etc.), but when a house becomes overpriced ,far beyond what is obtainable in the area then it’s makes the house less attractive and even makes you lose money, e.g. a house that is supposed to go for N800,000 and is placed at N1,000,000, you’ll be surprised at how a little difference in price can actually affect demand. Now here is the tip the house can remain in the market for 8 months without a tenant, and in the end the landlord may be forced to let the house out at the going rate thereby losing the sum of 8/12 xN800,000 that’s about N536,000 lost within the time when the landlord was contemplating a price reduction or just playing stubborn, trust me you don’t want to learn from experience, it’s better to just enjoy the return on your investment instead of trying to be the fore runner of losses, my candid advice though.


Summary[center][/center]
There are lots of other factors to consider while trying to let out your property, especially in Nigeria, but in the end I will have to limit it to these important ones so as not to make this article long, boring and unreadable; from time to time I will be writing articles from investment opportunities to the dangers of certain practices in the property section.
For those who have questions and further inquiries write us: zodiacnanthills@gmail.com,
I don’t want to drop my phone number because certain users in such forums abuse such privileges, write us and we would get back to you within 48hours.
My name is Mr Awodein Abiola
Enjoy your Nairaland experience.