How to Make Money from Short-Term Rentals in Nigeria

Hey there, future rental mogul.

If you’ve been eyeing the booming short-term rental market in Nigeria and wondering how to get your slice of the pie, you’ve landed in the right place.

I’ve spent years navigating this space, and today I’m sharing everything you need to know to turn property into profit through short-term rentals in Nigeria.

Why Short-Term Rentals Are Booming in Nigeria

Let’s chat about why this market is absolutely exploding right now. Nigeria’s growing tourism sector, expanding business travel market, and the rise of digital nomads have created the perfect storm for short-term rental success.

Lagos alone saw over 2 million visitors in recent years, with many preferring the homey feel of rentals over traditional hotels.

“I started with just one apartment in Lekki three years ago,” my friend Ade told me recently. “Now I manage five properties, and I’m making triple what I would from traditional long-term leases.”

Picking the Perfect Location

Location, location, location. It’s not just a cliché, it’s the golden rule of real estate, especially for short-term rentals.

In Nigeria, your top locations to consider include:

Lagos: Focus on Victoria Island, Lekki, and Ikoyi for business travellers and tourists
Abuja: Maitama and Wuse II are hotspots for government contractors and diplomats
Port Harcourt: GRA and Trans Amadi for oil industry professionals
Calabar: Properties near Tinapa Resort or Marina Resort for tourism
Jos: For its cooler climate and growing tourist appeal

Remember, proximity to transportation hubs, business districts, tourist attractions, and amenities like restaurants and shopping centres will significantly boost your booking rates.

Property Types That Perform Best

Not all properties are created equal in the short-term rental game. From my experience and market research, here’s what works best in Nigeria:

Apartments: Particularly 1-2 bedroom units in secure developments
Serviced apartments: These command premium rates, especially among business travelers
Small houses: In gated communities with good security
Guest houses: Especially in residential areas close to commercial centres

The key is finding the sweet spot between affordability (for you) and desirability (for guests).

Getting Started: Your Step-by-Step Guide

1. Run the Numbers First

Before diving in headfirst, let’s crunch some numbers. Here’s a quick calculation I always recommend:

Monthly revenue potential: ₦15,000-₦50,000 per night × average occupancy rate (50-70%)
Monthly expenses: Mortgage/rent + utilities + management fees + maintenance + platform fees
Estimated profit: Monthly revenue - Monthly expenses

Pro tip: Always account for seasonal fluctuations—December bookings in Lagos can command twice the usual rate.

2. Secure Your Property

You have three main options here:

Buy: The highest initial investment but potentially the greatest long-term returns
Rent to sublet: Lower entry cost but requires landlord permission
Partner with property owners: Offer management services for a percentage

If you’re just starting out, the third option often presents the lowest risk. I started by managing a friend’s apartment, taking 30% of the profit while they enjoyed passive income.

3. Legal Considerations

Let’s talk legalities, not the most exciting topic, but definitely one that can save you headaches down the road.

You’ll need to:

Register your business with the Corporate Affairs Commission
Check zoning laws in your chosen area
Obtain proper permits from local authorities
Review tax implications with an accountant
Ensure you have proper insurance coverage

A chat with a local real estate attorney can be worth its weight in gold here. My consultation cost ₦30,000 but saved me hundreds of thousands in potential legal issues.

4. Setting Up Your Space

Now for the fun part. Creating a space that guests love (and rave about in reviews) is crucial for success.

Focus on:

Safety: Quality locks, possibly CCTV, fire extinguishers
Comfort: Good mattresses, air conditioning, reliable hot water
Amenities: Fast WiFi (this is non-negotiable.), TV with streaming options
Backup power: A reliable generator or inverter system
Work-friendly spaces: A small desk area for business travellers

Remember, you aim to create a space that feels both comfortable and slightly aspirational. People book short-term rentals not just for a place to sleep, but for an experience.

Read This: 10 Amazing Things You Didn’t Know About the Lekki Conservation Centre

5. Mastering the Platforms

While word of mouth and local networks can drive bookings, online platforms will likely be your bread and butter. Here’s where to list your property:

Airbnb: The global giant with good penetration in Nigerian cities
Booking.com: Popular with international travelers
Hotels.ng: Great for reaching local Nigerian travellers
Shortlethomes: Specifically focused on the Nigerian market
Your own website: For direct bookings to avoid platform fees

Pro tip: Different platforms attract different clientele. Booking.com tends to bring more business travellers, while Airbnb attracts more leisure travellers.

6. Pricing Strategy

Pricing can make or break your short-term rental business. Here’s my approach to finding the sweet spot:

Research comparable properties in your area
Start slightly below market rate to build reviews
Implement dynamic pricing based on:
- Seasons (holiday periods command premium rates)
- Day of week (weekends vs. weekdays)
- Local events (conferences, festivals, etc.)
- Lead time (last-minute bookings can be discounted or premium)

“I use a simple spreadsheet to track market rates and adjust my prices weekly,” shares Ngozi, a successful host in Abuja. “This alone increased my annual revenue by 35%.”

7. Property Management Options

As your business grows, you’ll need to decide how hands-on you want to be:

Self-management: Highest profit margins but most time-intensive
Hiring staff: Cleaners, a maintenance person, and a check-in assistant
Full-service management companies: They handle everything for 15-25% of revenue

If you’re managing multiple properties, consider hiring a dedicated staff member rather than using a management company. You’ll have more control while freeing up your time.

Must Read: 5 Most Developed Countries in Africa and What Sets Them Apart

Navigating Challenges Unique to Nigeria

Let’s be real, running short-term rentals in Nigeria comes with unique challenges. Here’s how to address them:

Power Supply

Inconsistent electricity is perhaps the biggest challenge. Solutions include:

Installing an inverter system with batteries
Having a reliable generator with automatic changeover
Including electricity costs in your rental fee rather than as a separate charge

“I invested ₦1.2 million in a comprehensive power solution,” says Chidi, a Lagos host. “It paid for itself within eight months through better reviews and higher occupancy.”

Internet Reliability

Poor internet can tank your reviews quickly. Consider:

Installing multiple ISP options as backup
Providing a mobile hotspot as a backup
Being upfront about potential issues and having resolution steps ready

Security Concerns

Safety is a top priority for travellers. Enhance security by:

Choosing properties in gated communities or with security personnel
Installing adequate lighting and security cameras
Providing detailed safety information for guests
Building relationships with neighbours who can alert you to issues

Payment Processing

Payment challenges are common. Address them by:

Setting up accounts with multiple payment processors
Offering bank transfer options for local guests
Considering cryptocurrency for international transfers
Being clear about payment policies upfront

Scaling Your Short-Term Rental Business

Once you’ve mastered one property, expansion becomes the natural next step. Here’s how to scale effectively:

Systematize Everything

Create detailed processes for:

Guest communication (templated messages save hours)
Cleaning procedures (checklists ensure nothing is missed)
Maintenance schedules (preventative maintenance saves money)
Financial tracking (separate business and personal finances)

Build Your Team

As you expand, you’ll need reliable people:

Cleaners with attention to detail
A responsive maintenance person
A guest relations manager for check-ins and issues
An accountant for tax and financial planning

Diversify Your Portfolio

Consider different property types and locations to hedge against market fluctuations:

A mix of business and tourist-focused properties
Properties in different cities or neighbourhoods
Various price points to capture different market segments

Recommendation: Current Prices of Building Materials in Nigeria

The Future of Short-Term Rentals in Nigeria

The short-term rental market in Nigeria is still in its early stages compared to global markets, which means tremendous growth potential. Current trends to watch include:

Increasing domestic tourism as Nigerians explore their own country
Growing demand for unique, Instagram-worthy properties
Rising expectations for amenities and service quality
Potential regulatory changes as the market matures

“I’m seeing more Nigerian professionals booking weekend getaways within the country,” notes Folake, who manages properties in Lagos and Ibadan. “It’s a whole new market segment that barely existed three years ago.”

Final Thoughts

The short-term rental market in Nigeria offers exciting opportunities for those willing to navigate its unique challenges. With careful planning, strategic property selection, and excellent guest experiences, you can build a profitable business that grows with the country’s expanding tourism and business travel sectors.

Remember, success in this business isn’t just about having a nice property, it’s about creating memorable experiences that keep guests coming back and recommending you to others. Start small, learn the ropes, then expand as your confidence and capital grow.

Ready to turn that spare property into a profit machine? The Nigerian short-term rental market is waiting for you.