Hello,

I'm here to share my business story. I observed that real educative threads have practically vanished here on Nairaland. And trust me I have been here for several years

These days its all about Social media gossip, politics, insecurity, bla bla bla.

So I have decided to share my practical story and hope to make it educative and interactive.



I have been actively involved in Transportation business for a while and quite a number of people know me here on Nairaland.

However I decided to take a dive into the real estate sector.

Sincerely real estate is one of the most profitable businesses in Nigeria and the reason is simple. You provide a basic need.

People must live in a house irrespective of social status, tribe or religion.

Every human being sleeps in a house on a daily basis.

Its plain and simple.

However the industry is very big and as an investor you choose what aspect of real estate business you wish tp dabble into.

After series of researc I decided to venture into the short let rental business.

Basically provide fully furnished apartments for short let.

Let the journey begin.............


Kindly push to front page:

@FOD

@dominique

@puskin

@naijacutee

A quick guide into Short Let Industry



As the name implies, short-let describes furnished apartments, flats or houses that are rented for short periods, usually daily, weekly or monthly as opposed to annual rentals in the unfurnished apartment rental market.

Short let apartments are firing shots at hotels as the big-wigs in Nigeria’s hospitality industry are losing market share to the smaller short stay ventures.

Not many people predicted that an industry as acute as the apartment and hospitality would become as economically fruitful and profound as it is now. A niche which has been carved for people who are willing to take up the challenge in its stride and run with it; it’s produced results that industry leads never anticipated.

The COVID-19 pandemic which resulted to a long closure of many establishments across the world did not topple the solid foundation of the Short let World. Rather, it improved the short lets business in Nigeria.

Low cost of the home-like short let apartment, the fear of hotel crowd and high chances of virus exposure, ability to choose the apartment of choice are top reasons short-stay apartment saw a boom in 2020, and is projected to maintain the same momentum, as compiled from BusinessDay survey.

Estimated at hundreds of millions of naira, Nigeria’s short let market is having a slice of the hospitality business in terms of the volume and value of transactions it is taking from the conventional hotels.

While data from Statista put the average occupancy rate of Nigeria hotels at 47.5 percent in March 2021, a survey by BusinessDay across three Nigeria’s busiest cities shows the average occupancy rate for short let apartments increased to 76.3 percent in March from 54.6 percent reported three years ago.

Analysts believe short let holds investment opportunity for strategic investors.

Before the COVId-19 induced growth, short-let apartments in Nigeria were already gaining grounds as the owners of the hub for short let and the biggest in the world, Airbnb ranked Nigeria in 2019 as one of the fastest-growing markets globally for Airbnb.

Described as the most affordable option for long month stays. They are seen as an alternative to hotels. Some of the property operators permit pets, just like some people would ordinarily allow in their homes.

I will appreciate some form of response.

Kindly type hello or Hi

Then we proceed....

Remember I still have lots of stories and valuable information to share....

Fire on

Interesting

My first major step was information gathering..


I went on a journey to gather as much information as possible.

Lesson number 1: Don't start a business you know nothing about. Know as much as possible before you invest 1 kobo.

How did I gather information?

On the internet and from people in the industry.

I did not go in search of money first, I went in search of information and knowledge.

Remember the holy book says " Wisdom is a defence".

To be continued later tonight....


Feel free to drop your comments

Following...

Okada, drop me here

Nice Post. I am interested.

Nice... following

Welcome back

So lets continue.

I spent several months just to gather relevant information.

Key information required to succeed in the short let business:

1. How to determine the ideal location for the short let business.

2. How to select the ideal apartment type

3. How to raise funds

4. Basic amenities required in your apartment

5. How to run the business

6. Marketing and publicity.

Those key aspects listed above will determine how far you will go in the business.

I will share with you how it should be done and how I was able to do mine.

In some cases I had to make adjustments based on my peculiar situation.


Welcome on board....

Keenly interested.

To be continued by 7pm

Ideal location for short let business.

Short let apartments thrive in residential areas with a good mix of commercial activities and recreational centres.

A place where people can reside and easily gain access to bank branches, supermarkets, cinemas, hang out spots and many more.

A place where they can easily get all basic needs met.

Ideal places for short let in Lagos:

Lekki Phase 1
Victoria Island / Oniru
Ikeja
Yaba
Surulere
Gbagada
Festac/ Amuwo Odofin etc.

Its important to realise that patronage differ based on Location.

The neighbourhood should be relatively safe and secure.

There is a website where you can check demand trends for short lets based on Location. The website has statistics to cover every state in Nigeria.

It will be revealed later.

Generally short lets do not thrive in remote areas or outskirts of cities. Outskirts like, Sango Otta, Epe, Ikorodu. These areas are not hot spots for shortlet.

However you can still do business here and make money if you are very business savvy and understand the market. It will require more work.

Let me know if you have been able to learn a thing or two from this thread.

Drop comments or questions.

Thanks

No response or comment since last night.

Are we still interested?

If yes kindly let me know.

Then we proceed daily by 7pm.

I will appreciate comments

An Interesting read. Please continue, I'll save my questions for later.

Welcome back...

What is the ideal Apartment for short let business

Research has revealed that 2 and 3 Bedroom apartments are the most sought after in the industry.

Next on the demand scale are Apartments for parties. 4 bedroom or party cribs specifically suited for house parties, get togethers, Bach eve parties, baby showers etc.


However there is also reasonable demand for Studio apartments and Mini flats.

Other factors to consider:

The apartment must be in a clean and serene compound.

It should be spacious with adequate parking space and some room for outdoor relaxation no matter how little.

If you have space and resources, make adequate provision for an outdoor play area, swimming pool, gym etc. This will also enhance acceptance.

Following back to back.... weldone bro

mrsage:
I will appreciate some form of response.

Kindly type hello or Hi

Then we proceed....

Remember I still have lots of stories and valuable information to share....

Keep it coming.

I'm here

Great job Sir. Fire on

Next class is 7pm tonigh

Let me mark my attendance

How to fund the Short let business?

To set up a short let apartment rental business you nedd to get the apartment first.

The big question will be how do I get the apartment ?

First determine what type of apartment.

Is it a studio flat also called Room self con?
Or Mini flat or 2 or 3 bedroom flat.

The options available

a) Build/ Buy and use for short let.

Here you either buy or build from scratch then use the property for the short let business.

This is good if you have the resources. Here you own your property and you have total control.


b) Long Lease to Short let.

Here you take a long lease on an apartment. Maybe for 10 years and above.

You pay the lease amount and you are free to use the apartment for the agreed duration.

This is what I mostly recommend and this is the path I also follow.

The apartment I manage now is on lease.

I took a 20 year lease on the apartment so I have rest of mind and freedom for 20 yrs.

No landlord wahala. No annual payments.

The apartment is here in Lagos in a very acessible part of the mainland in Lagos.


c) Rent yearly and use for short let.

Here you rent an apartment, pay rent yearly then use it for short let.

This is a risky option. The risk factors are very high. I usually do not recommend this option for obvious reasons.

Landlord troubles. A landlord could increase rent by 50% at any point. This will affect business planning.

Also it is important to add that a typical short let business may need about 2-3 years just to break even and attain stability.

What if the landlord decides tp issue a quit notice after the 1st year? What will happen to the business?

If you must rent to short let you must thread with Caution. You must be very sure of your sales projections.

Its a risky path but possible if you have the "liver" and knowledge.

This is the cheapest option by the way.

Let me share some pictures here.

1st picture. Long lease receipt

2nd picture. Installation at the apartment

Setting up the apartment...

mrsage:
Let me share some pictures here.

1st picture. Long lease receipt

2nd picture. Installation at the apartment

you mean you got the house for 500k for the duration of 20years or 500k/year for 20years?

justifiedcoyy:
you mean you got the house for 500k for the duration of 20years or 500k/year for 20years?

The long lease amount was paid at once. Its not charged yearly.

Pay once and the apartment is yours for 20 years.


The amount is far more than 500k