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Building A Student Hostel : Profitability And Challenges - Properties - Nairaland

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Building A Student Hostel : Profitability And Challenges by Reflector: 8:11am On Jun 17, 2011
People say it is more profitable than building flats to let? What do you think?

In addition if you are a student in any of the universities in Nigeria (or have the information) kindly state how much off campus accommodation is rented for per session in the private hostels around your school, don't forget to also give the name of the university. Thanks
Re: Building A Student Hostel : Profitability And Challenges by naijacutee(f): 8:40am On Jun 17, 2011
I think this topic should be stickied. In this case, I would say location is king. You are on to a winner if the said student hostels are located in the "right" area, close to a high-traffic university, public amenties and not lost in the bush somewhere, and contain all the facilities students need/want.

I'm assuming here that the rent turnover time is shorter (as opposed to bi-annual cycle landlords charge for flats). In this case, I think the landlord can use the smaller living area per occupant to his/her advantage i.e I think living space for a 3 bed flat can easily be comfortable living space for 3 x students = 3 lots of rent.

Maybe we need real life figures to determine.

P.S I think this should be stickied 
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 10:04am On Jun 17, 2011
Indeed location is key. It needs to be near enough to the campus for it to be viable. Do you have any idea of how much such hostels are rented out for per sessions or are the rates yearly?
Re: Building A Student Hostel : Profitability And Challenges by Dis Guy: 10:42am On Jun 17, 2011
There was a similar topic but it was more of an advert with every tom dom and harry looking for clients instead of actually analysing their proposal

http://www.nairaland.com/nigeria/topic-178700.0.html


I heard some private hostels in Lagos are charging upto 350,000 a year

Ondo state 80,000 a year
Re: Building A Student Hostel : Profitability And Challenges by Dis Guy: 11:37am On Jun 17, 2011
Emerald Suites, consists of two blocks of three storey buildings and is located close to the university gate. A somewhat 21st century abode, the rooms are fitted with some of the aforementioned facilities. Our investigations revealed that a bed space in a three-man room per annum is N120, 000. For a two-man room is N160,000 while that of a four- man room is N100,000 per bed space. A sole occupant who desires privacy is at liberty to opt for a one-man room that costs N320, 000. Aside from these, a resident is also mandated to pay N2,500 as registration fee, N20, 000 for utilities and a refundable deposit of N5,000.

The story is not any different at American Muller, another luxury hostel on 82 and 84, Community Road, Pako Bus-stop, Bariga. The hostel has its own transformer and two standby generators. The rooms which are only fitted with Dstv cables (you are expected to move in with your own mattress and pillow) cost N120,000 for a one-man room. There, the two-man room comes in two different categories. Bed spaces in smaller rooms costs N93,500 each while that of the bigger rooms attract as much as N150,000.

At Queens Quarters at Abule Oja managed by one Jide who is believed to be the son of ace broadcaster, Bisi Olatilo, a one- man room costs N265, 000, two-man room is N165,000 and a three- man room goes for N135,000 per bed space.

2008 Punch newpaper

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Re: Building A Student Hostel : Profitability And Challenges by Acidosis(m): 1:44pm On Jun 17, 2011
great investment! Here in DELSU, the annual worth of ''self contains'' ranges btw 40k - 150k ,a small room, a 'tiny' kitchen and toilet. Those with huge prices have some attachments like tiles, ceiling fan, A.C, DSTV etc.,
yet people keep searching for these hostels. Infact, so many students pay while building is still under construction.

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Re: Building A Student Hostel : Profitability And Challenges by Reflector: 2:21pm On Jun 17, 2011
It seems a student hostel must come with some minimum level of furnishing eg. a bed with mattress, reading table and chair as well as a two seater chair for visitors. I also feel it is important to provide electricity throughout the night (from 7pm to 6am) in case they need to study/read at night but the challenge here is fueling the diesel gens. I don't think students can afford to pay monthly service charge and building it into the rent would make it too expensive for most students.

Internet isn't a luxury but a basic necessity for students to do their research with.
Re: Building A Student Hostel : Profitability And Challenges by COMPAQ(m): 4:10pm On Jun 17, 2011
Yeah, I think student hostels can be profitable. I have considered the idea in the past, but never put the plan into action.

Accomodation on campus is a big issue. Many new universities, especially the state ones take off without hostel accomodation to reduce cost of initial start up, so many students stay in pretty poor rooms the villagers build, scattered everywhere and often requiring students to pass bush paths etc. i.e nothing very structured. OSU/OOU is a case in point, cos that's my alma mata.
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 8:20pm On Jun 17, 2011
Does anyone know how much off campus students hostel are rented out for in Uyo?
Re: Building A Student Hostel : Profitability And Challenges by Pharoh: 5:44am On Jun 18, 2011
This should be a very good investment to look into.
Re: Building A Student Hostel : Profitability And Challenges by mcnepow(m): 6:52am On Jun 18, 2011
Federal Uni of Agriculture, Umudike, Abia state.
A twelve month rent for a 'self-contain' (a room, toilet, bathroom and kitchen al together) goes for between 70k - 100k, some go for as much as 120k. They are located at a walking distance from the school.
Re: Building A Student Hostel : Profitability And Challenges by mcnepow(m): 6:59am On Jun 18, 2011
Most buildings are a 2-storey 30 room building. 10 rooms on each floor (5 rooms to the left and another 5 rooms to the right facing one another) having a stair case at the middle of the building. There is usualy an extra room detached from the building but inside the fenced compound that serves as a security unit/caretaker lodge (one individual serves both purposes in most cases).

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Re: Building A Student Hostel : Profitability And Challenges by mcnepow(m): 7:05am On Jun 18, 2011
The rooms should be big enough for 2 people to live in, a room for toilet with space to bath in (same room serves both purposes), a kitchen having a water sink and most especially a balcony for a single cylinder, single stroke, 750watts petrol generators (i-pass-my-neighbour) and maybe a wardrobe.
Re: Building A Student Hostel : Profitability And Challenges by mcnepow(m): 7:11am On Jun 18, 2011
Inside the buildings should be fitted with tiles, painted, plumbing and wiring properly done. Povision of transformer is a plus and provision of a diesel engine for the water pump is a must. Finally, u have to see a prototype of these buildings so that u dont overdo or worse still underdo. At 100k per annum per room, u make 3million naira yearly for as long as u keep maintaining your building to meet current standards. Will write more if i remember anything.
Re: Building A Student Hostel : Profitability And Challenges by naijacutee(f): 8:28am On Jun 18, 2011
Reading your responses, I can see that living spaces are shared and rent is collected per bed space. This makes me wonder what exactly the attraction is. I understand that we are all very pro-community, but is there a possibility that some students would prefer their privacy? For example, they wouldn't mind sharing a lounge/parlour but they all have different rooms to retire to at the end of the day?

If this doesn't exist, I would say that could be an opportunity. Offering accommodation with not only amenities (I mean basic, necessary things - electricity, running water, mosquito nets - not expensive tiles on the walls), but also the attraction of personal study space. My instnict is that this will work for students and working professionals alike. Just because you're creating personal space doesn't mean that you will need bigger areas - you'll just need to make more effective use of the space that is available. For example, you can suspend the bed in the air, and make use of the space underneath for study space, sofa, storage etc. Here';s an example of what I mean.   

Re: Building A Student Hostel : Profitability And Challenges by M M M(m): 10:35am On Jun 18, 2011
is better than flat,
but which town is dat?
Re: Building A Student Hostel : Profitability And Challenges by maninmood(m): 11:15am On Jun 18, 2011
I have a hostel in Osun State and I charge 165k per year, not dt costly cuz it has everything you can think of apart from standard gen and bed, tv; others are available including split ac, fridge, security,beautiful building & secure environment. Location: Oshogbo. A plot goes for 4mil there.
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 11:47am On Jun 18, 2011
The demand for student hostel is quite high moreso as universities are admitting more students every year. This is a business that would take a lot time before it reaches saturation point. The challenge however is that vacant land is practically not available around the old established universities such as Unilag, UI etc but for the newly created universities which are established in remote towns/villages cheap land is in abundance, demand would be high but rent would be much lower.
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 11:51am On Jun 18, 2011
maninmood:

I have a hostel in Osun State and I charge 165k per year, not dt costly cuz it has everything you can think of apart from standard gen and bed, tv; others are available including split ac, fridge, security,beautiful building & secure environment. Location: Oshogbo. A plot goes for 4mil there.

This is great. If I may ask what is the layout of your hostel (i.e how many floors and rooms per floor) also if you don't mind how much did it cost you to build it and furnish. Thanks
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 12:20pm On Jun 18, 2011
naijacutee:

I think this topic should be stickied. In this case, I would say location is king. You are on to a winner if the said student hostels are located in the "right" area, close to a high-traffic university, public amenties and not lost in the bush somewhere, and contain all the facilities students need/want.

I'm assuming here that the rent turnover time is shorter (as opposed to bi-annual cycle landlords charge for flats). In this case, I think the landlord can use the smaller living area per occupant to his/her advantage i.e I think living space for a 3 bed flat can easily be comfortable living space for 3 x students = 3 lots of rent.

Maybe we need real life figures to determine.

P.S I think this should be stickied 


Thanks you have given me some nice ideas there, although I don't trust our workmen to do a proper bed suspension with wood or even iron, one can however do a concrete deck for the bed area and this would enable one reduce the overall size of a room from a standard 12feet x 12 feet to say 10 feet x 10 feet and achieve more seating area.

A standard room from floor to ceiling is about 10feet high so if one suspends the bed platform at 7 feet above the ground making it 4.5feet wide and 10 feet long you can fit a wardrobe under and a reading table while leaving the undecked area for relaxation and watching TV etc.
Re: Building A Student Hostel : Profitability And Challenges by Samunosuke(m): 4:01pm On Jun 18, 2011
In calabar hostels in etta-agbor located close to Unical cost about 180k,while those around marian road are about 150k.Thats rent only, no generator,a.c etc.
In makurdi,for B.s.u 70k will get you a very spacious place.For UniAgric,d highest right now is 80k but there are a lot of ongoing building projects so the price might soon drop.No gen or a.c etc too.
Re: Building A Student Hostel : Profitability And Challenges by chamber2(m): 9:20pm On Jun 18, 2011
It seems a student hostel must come with some minimum level of furnishing eg. a bed with mattress, reading table and chair as well as a two seater chair for visitors. I also feel it is important to provide electricity throughout the night (from 7pm to 6am) in case they need to study/read at night but the challenge here is fueling the diesel gens. I don't think students can afford to pay monthly service charge and building it into the rent would make it too expensive for most students.

Internet isn't a luxury but a basic necessity for students to do their research with.

How many hostels contain all these facilities.But good thought anyways.

When i was in owerri , 2008 precisely,  hostel accommodation at IMSU and FUTO cost about 60k-90k(depending on location) with basic facilities . Students come with their own beds etc.But there has to be constant water, security etc. In your case i think internet will be a plus.
Re: Building A Student Hostel : Profitability And Challenges by maninmood(m): 10:15pm On Jun 18, 2011
Reflector:

This is great. If I may ask what is the layout of your hostel (i.e how many floors and rooms per floor) also if you don't mind how much did it cost you to build it and furnish. Thanks

I spent close to 35mil including the land purchase. 16 rooms, a storey building. 8 rooms on each floor. I would have loved post a picture of it, but for security reasons,sorry,no.
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 11:17pm On Jun 18, 2011
maninmood:

I spent close to 35mil including the land purchase. 16 rooms, a storey building. 8 rooms on each floor. I would have loved post a picture of it, but for security reasons,sorry,no.

Thanks it seems student hostel has about the same return on investment as flats for rent, however the overhead is more as you need to have a caretaker on site to manage the property as students can be rough and carefree.
Re: Building A Student Hostel : Profitability And Challenges by Solozzo(m): 11:44pm On Jun 18, 2011
Enough of the profitability. How about the risks, challenges and the cons?
Re: Building A Student Hostel : Profitability And Challenges by zenatta: 5:50am On Jun 19, 2011
This is a nightmare. I am aghast that rent is manipulated to amounts exceeding a hundred thousand p.a for school kids, university level not withstanding. Shame on a system that allows this
I owned a property near Unilag before I sold in 07, occasionally I had the one or two odd tenants, children really who needed to be near school. It was referal and parents/guardian would be in tow, coming for the first time to view.
Prices above are outrageous so @ Reflector, note. Besides you'd always make your money
I have to go back to sleep now, using a phone. Would definitely get back to thread
@Solozzo, be ready for student's riotous lifestyle and late, very late rent payments.
@naijacutee, loft bedspace a wonderful idea, but who are your builders, because students will be students. I stayed way off the suspended bed because it was a rental
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 7:13am On Jun 19, 2011
Solozzo:

Enough of the profitability. How about the risks, challenges and the cons?


Cult membrs may stay in your property and a frat fight might break out resulting in extensive damage or worse the building being burnt down.
Re: Building A Student Hostel : Profitability And Challenges by Reflector: 7:23am On Jun 19, 2011
zenatta:

This is a nightmare. I am aghast that rent is manipulated to amounts exceeding a hundred thousand p.a for school kids, university level not withstanding. Shame on a system that allows this
I owned a property near Unilag before I sold in 07, occasionally I had the one or two odd tenants, children really who needed to be near school. It was referal and parents/guardian would be in tow, coming for the first time to view.
Prices above are outrageous so @ Reflector, note. Besides you'd always make your money
I have to go back to sleep now, using a phone. Would definitely get back to thread
@Solozzo, be ready for student's riotous lifestyle and late, very late rent payments.
@naijacutee, loft bedspace a wonderful idea, but who are your builders, because students will be students. I stayed way off the suspended bed because it was a rental 

Unless you are a philantrophist, student hostel is an investment for which you need to recoup your capital and make profit even while maintaining the place. you would definitely make money from it but it is a long term investment. For anyone going into it just prepare your mind that it is an investment that you would appreciate more after you retire and need a steady income to augment your pension.

Personally I think it is a good investment the challenge is getting a good land within walking distance from the school, ensuring that it is built to withstand rough handling. provid basic furnishing so students move in with just their books and bags and be prepared for students who would squat their friends.
Re: Building A Student Hostel : Profitability And Challenges by swiftycool(m): 7:27am On Jun 19, 2011
From experience, female student hostels are a safer investment due to usual university cult crises with guys, many ladies who opt to stay in such hostels as i have observed usually have rich Aristos to foot their bills. A major challenge however is locating a land for development near campus as this is hot cake, however a development located quite a distance with dedicated perhaps hourly bus service which could be contracted to a transporter might be a good idea
Re: Building A Student Hostel : Profitability And Challenges by odiaero(m): 8:34am On Jun 19, 2011
naijacutee:

Reading your responses, I can see that living spaces are shared and rent is collected per bed space. This makes me wonder what exactly the attraction is. I understand that we are all very pro-community, but is there a possibility that some students would prefer their privacy? For example, they wouldn't mind sharing a lounge/parlour but they all have different rooms to retire to at the end of the day?

If this doesn't exist, I would say that could be an opportunity. Offering accommodation with not only amenities (I mean basic, necessary things - electricity, running water, mosquito nets - not expensive tiles on the walls), but also the attraction of personal study space. My instnict is that this will work for students and working professionals alike. Just because you're creating personal space doesn't mean that you will need bigger areas - you'll just need to make more effective use of the space that is available. For example, you can suspend the bed in the air, and make use of the space underneath for study space, sofa, storage etc. Here';s an example of what I mean.   


Hello Sister, help us make that Forex thread in you Section Sticky, thanks
Re: Building A Student Hostel : Profitability And Challenges by Fiver: 9:27am On Jun 19, 2011
maninmood:

I spent close to 35mil including the land purchase. 16 rooms, a storey building. 8 rooms on each floor. I would have loved post a picture of it, but for security reasons,sorry,no.

true a nairalander will look at the pictures and burgle your properties? incredible i tell ya! shocked
Re: Building A Student Hostel : Profitability And Challenges by alexola20(m): 12:13pm On Jun 19, 2011
Good investment.

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