House rent is the amount payable for keeping, or renting an apartment for an agreed period (also known as tenancy period).
An attractive way of investment in this part of the world is the procurement of real estate assets such as bare lands, buildings or both. The value of apartments increases in the long run moreover, one can also obtain passive income from land and buildings. Interestingly, it turns out that one can potentially earn more by buying a house.
A beneficial solution may be to rent a house to a second party (larger group of tenants) or to divide the property into smaller, separate apartments and rent to individual persons at an agreed rent.
Renting a home is becoming more and more popular nowadays as the high cost of building a house persists. The medium and low-income earners often opt to rent an apartment pending when they will have enough funds to build their own house.
In some parts of the world, including Europe, Asia, Africa (of which Nigeria is popular) etc., house rentals are very common.
House rent is an additional source of income to add to your household budget. It is also meant to provide additional security (during retirement, for example) for a lot of households.
Why is House Rent Expensive in Lagos?
House rents in Lagos are quite expensive compared to other neighbouring states within the same Geo-political zone (South West), this is because of the high demand for housing units over the very few housing accommodations available to be rented out.
The presence of high-profile and classic ventures and business Headquarters has influenced the asking rental prices of apartments, as the rush from potential tenants outweighs the available houses, hence rents are increased periodically to enable those who can afford it to pay. Although not all parts of Lagos are that expensive; there are houses on the mainland that are affordable to an extent.
Areas like Lekki appear to be so expensive due to the high-class structures and VIP tenants’ willingness to rent the houses at whatever rent it is worth, Lekki is an expensive neighbourhood in Lagos where only the affluent are seen, it remains one of the most expensive zones in Nigeria.
In general, the states with the most expensive rent in Nigeria are; Lagos, Port Harcourt, Enugu, Delta, and FCT-Abuja,
How much is the Average Rent in Lagos?
Rents in Lagos differ depending on the neighbourhood, however, the average rent payable for a detached house (duplex house) ranges between N2.5m (two million, five hundred thousand naira) to N7m (seven million naira), 3bedroom flats command an average rent of between N1m (one million naira) to N2m (two million naira), rent of bungalow house is between N1.7m (One million seven hundred thousand naira) to N5m (Five million naira), 1bedroom flat also known as mini flat go for average rent of N700,000.00 (seven hundred thousand naira) and room self-contain apartment command average rent of N350,000.00 (three hundred and fifty thousand naira) respectively.
Why is House Rent High in Nigeria?
As earlier pointed out, house rent in Nigeria is dependent on the location, rent on the mainland is relatively lower than rent on the Island. Renting a house in Nigeria is becoming very expensive because of the high inflation rates which translates into the cost of building materials, house maintenance, and labour. In addition, the housing demand has always been on the edge as the country’s population continues to grow with immigrants.
Why Houses Are Rented
Renting an apartment or a room is undoubtedly cheaper than renting a detached house. The majority of families that can afford to rent a detached house (duplex house) are in the circle of people who can either buy it or construct it from scratch and end up renting it to tenants at a reserved rent to recoup their return on investment within a stipulated timeframe (pay-back-period).
To the high-income earners purchasing a terraced home for rental purposes is one of the safest options to make residual revenue. Suburban little homes are comparatively well-liked by prospective tenants because of the rent involved. Almost without any significant issues, they may be rented in place of big, independent structures that command higher rents beyond the capacity of low-income earners.
Purchasing a home to rent is viewed as a hazardous decision considering the present economic condition. But keep in mind that the owner of such a property might anticipate a sizable monthly contribution to the household budget if they are successful in finding a long-term tenant.
A residence can rent for several hundred or even several thousand Naira a month. However, it’s important to remember that when looking for a good tenant, expensive houses could stay vacant for several weeks. This implies that it won’t bring in any money throughout this period (void period).
On average, the cheapest house rent in Lagos is between N50,000.00 (fifty thousand naira) to N80,000.00 (Eighty Thousand naira) on the outskirts of the mainland. Any house rent less than N50,000.00 will be classified as a slum.
Issues in Rented Houses
In Nigeria, groups of individuals rent apartments most often, which might be targeted at contract workers for industry, foreign nationals, or students. There are benefits and drawbacks to renting out a substantial portion of your house to several individuals.
One advantage that should be highlighted is the possible revenue from such a rental. The property is susceptible to significant wear and tear, which might necessitate costly maintenance. Additionally, the property owner needs to consider the possibility of difficulties in collecting rent from multiple tenants.
It is wise to form a joint agreement with the tenants that contains the necessary clauses, such as their joint and several liability for the rent, to guard yourself against rent default.
Converting Big Houses into Smaller Apartments to Collect Higher House Rent
Some landlords want to turn large houses into smaller apartments to accommodate more rentpayers. This could be a useful solution for big houses that are not easily rented out on time. This makes it possible to divide a single building into two or more independent units, improving the likelihood of renting either one or all simultaneously.
The tenants get access to a room, kitchen, and bathroom, among other amenities, at the separately entered premises. There is no denying that the most crucial aspect of renting a property is effectively modifying the space to suit the demands of possible tenants.
It is important to keep in mind that splitting a house into flats is both legally and physically permissible. The first is construction-related, to create a distinct, autonomous space for every apartment.
Building partition walls, installing entry doors, dividing installations, installing a new kitchen and bathroom, and installing pre-paid or post-paid meters for each property may all be required. Due to its legal nature, the owner must ascertain if getting a construction permit or notifying the planning authority is necessary for the intended conversion before beginning any work.
Renting out a home is an investment with benefits and drawbacks. If the property is suitably separated into at least two distinct premises, it can prove to be a better investment in some instances than renting a single apartment. After that, a prospective tenant will find it more appealing.
Frequently Asked Questions
Do Nigerians pay rent monthly?
How can I challenge my rent increase in Nigeria?
Details are highlighted here
How much can a landlord increase house rent in Nigeria?
This depends on the type of agreement both parties entered. I’ve discussed this in a previous article.
How much is house rent in Nigeria per month?
Depending on the location, type and nature of accommodation. House rent in Nigeria ranges between N40,000 (forty thousand naira) to N1,000,000 (one million naira) per month. You can determine your monthly rent by dividing the annual rent by the number of months in a year (12 months).
Thank you for reading!