How to Start a Small Apartment Business in Lekki
A few things, first of all, demand for small apartments is quite high in certain areas of Lagos. A lot of people want to get an apartment right now, mostly young people wanting to live close to work. For this reason, property prices for small apartments in Lagos, most especially Lekki have been surging over the past few years. Demand for cosy apartments, not built as an afterthought. heavily outweighs supply.
Prospective tenants are willing and ready to pay (for rent) anywhere from Naira 300,000-Naira 700,000 per year; for a self-contained room, usually a bed and bathroom usually with a shared kitchen or no kitchen at all. And Naira 600,000-Naira 1,500,000 per year, for a one-bedroom apartment depending on the location of course.
Buy Off Plan
Buying off plan properties can be a profitable venture especially if you are one of the first off-takers. Long story short you’ll be getting the best prices and can spread payments according to the construction timeline. You can eventually sell your units at a premium once construction is done. Alternatively, you can rent out your apartment and make passive income for many years to come. We sell off plan properties for a lot of developers that we have personally vetted. You can always sign up for our newsletter to receive updates on future opportunities.
Develop Your Own Property
You can look at developing your own property for rent or for sale. Developing property is a time consuming exercise however and one that requires deep pockets to finance/funding from investors or via loan facilities. Either way, you can develop your own residential development and cash out. If you’re really good with negotiating you can even sign a joint venture agreement with a land-owner to avoid the cost of buying land.
This has never been done before in Lagos or Nigeria. Market data suggests there might be a demand for these sorts of houses. However, the issues are:
- Finding the right parcel of land in a great location that can accommodate such a project.
- Getting the right artisans to work on such a project, as you would need to supervise the fabrication and construction of the tiny houses.
- Finding the right materials for the climate.
Negotiate Like a Politician
Okay so sometime a few years ago I learned of this business whereby developers enter into agreements with landlords of big properties. We’re talking a property with anywhere from 5–10 bedrooms or more.
They agree to a 10 year rental agreement which allows them to re-partition said property and sublease it for the same time frame. Basically the name of the game is re-partition as much as you can and rent out the property to as many people as possible.
I’ve seen so many buildings undergo such facelifts. You could literally take an average 5 bedroom house and BQ (Naira 5 million/year – Negotiated to Naira 4.5 million/year). Then re-partition it in such a way that you end up with:
- 2 miniflats (room and parlor with open plan kitchenette)
- 5 self contained rooms all ensuite with a shared kitchen.
You’re looking at making a rental income between Naira 5.45 million/year. The bigger the property the more returns you can make.
In conclusion, there are many ways as long as you can be a bit creative, and business savvy.