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The Business And Profitability Of Rental Properties - Properties - Nairaland

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The Business And Profitability Of Rental Properties by spyder880(m): 10:00pm On Jul 24, 2011
In the next few paragraphs, we shall be exploring the Nigerian property market with a special focus on rental apartments. I have in the past few days been looking at the business of rental properties as a whole, the merits and demerits. I will also be looking at the profitability of each type of rental apartment especially as it concerns various locations and cities. In the past, I had looked at the business of building blocks of flats and its expected profits, but I decided to expand the horizon and provide my readers with a wider choice should they want to invest in other types of rental apartments.
Re: The Business And Profitability Of Rental Properties by spyder880(m): 10:06pm On Jul 24, 2011
The property market

The Nigerian property market is still booming, despite the harsh economic environment we found ourselves as a result of the economic slump the world is experiencing, Nigeria is a part of the world and as such we had our fair share of the problems from the world economic meltdown. Our stock market crashed heavily between the years of 2007-2010. Yours faithfully, a stock investor and speculator lost some huge amounts before I pulled out all my funds and went back into the property market before I discovered stock as a business.
Our property market is still booming especially in the single family and multifamily segments. Another section that is experiencing growth is the student hostel apartments. This growth could be attributed to the steady increase in the population of this country, more young men are getting married daily and childbirth statistics are expected to be trending upwards as our people just love children and family values. Even with the increase in building projects going up everywhere, there is still a huge demand not being met by the supply of adequate houses. Good business people should think about investing in the property market as its one of the business you invest in with minimal risk of failure, only that it will take a while before you recoup your investment and start making returns in the form of profits.
The government as usual has been totally indifferent to the plight of the people, they seem not to be interested in providing the masses with housing options that will satisfy their shelter needs. The few attempts they make in housing is aimed at the very rich, they build estates with mostly duplexes which you could not purchase with any amount less than N30 million. How many people can afford that type of money in the populace, clearly about less than 1% of the population, the remaining 99% can only rent their houses. Don’t even think mortgage because the conditions are not attractive.
Re: The Business And Profitability Of Rental Properties by spyder880(m): 10:13pm On Jul 24, 2011
Why I am conducting this study

I have been in the rental business as an investor in the past 13 years and had gone full circle in all types of structures. I know the difficulties, the pitfalls, the pains and the gains of renting as a business and understand the conditions that make renting profitable. I understand the T.O.T. (tricks of the trade) and have a competent team of builders I work with. As a former land and house agent who had rented landlords houses for them and collected commissions, as a tenant who has lived in many houses and as a caretaker in a house I lived in the past, as a landlord and as a property enthusiast, I think I am competent to talk about this topic from various perspectives and field questions from prospective investors as per the conditions obtainable in the property market. In all, it’s a business where you cannot lose as your investment will mostly appreciate as the years rolls by.
Re: The Business And Profitability Of Rental Properties by spyder880(m): 10:20pm On Jul 24, 2011
Renting duplexes

The market for duplexes is not so large because only a tiny proportion of the population has the need for it. Those that need duplexes are the upscale rich who by any reason like transfers and relocation find themselves in another city, to maintain the standard of life they are used to, they look for duplexes and settle with their family. Those seeking to rent duplexes are usually competent professionals in their fields. The selling point for the prospective tenant is the lure of a compound of your own, to rent a house where you can open and lock the gate whenever you want and use the entire compound for you desires without any other tenant disturbing you. There could be two duplexes of same dimensions built in the same compound as twin duplex. It will be joined together with a common roof but the compounds are better separated by a fence.

Re: The Business And Profitability Of Rental Properties by spyder880(m): 10:27pm On Jul 24, 2011
more duplex

Re: The Business And Profitability Of Rental Properties by spyder880(m): 10:31pm On Jul 24, 2011
more duplex

Re: The Business And Profitability Of Rental Properties by spyder880(m): 10:50pm On Jul 24, 2011
Renting bungalows

The prospective tenant for a bungalow has a lot of similarity with those seeking duplexes but may not want to spend as much as those seeking to rent duplexes. Renting bungalows is cheaper than duplexes. All other conditions like a separate compound of your own is still obtainable with a bungalow. We also have twin bungalows separated with a fence.

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:07pm On Jul 24, 2011
more bungalow

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:15pm On Jul 24, 2011
Renting a block of flats

This is the multi family unit where between 2 and 8 families share a house, under one roof, living in a compound and using one gate to get into their houses. This style of house is usually segmented into floors of two flats each. Some of the investors who build blocks of flats build only 2 flats, some 4, 6 and 8 flats. However, it is not impossible to hear there are houses where the investor builds as many as four floors on top of the ground floor. This will make it five floors and 10 flats. It is advisable that builders demand for lifts to be installed in such high rise buildings to aid ascent and descent. It will be very useful in periods of emergencies like fire outbreaks. There are different sizes of flats, some build 2 bedroom flats; others build 3 bedrooms while those with a larger family are on the lookout for 4 bedroom flats.

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:25pm On Jul 24, 2011
more flats

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:31pm On Jul 24, 2011
more flats

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:34pm On Jul 24, 2011
more

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:41pm On Jul 24, 2011
more

Re: The Business And Profitability Of Rental Properties by spyder880(m): 11:51pm On Jul 24, 2011
Renting a block of self contain apartments

By self contain apartments, I mean semi flats of 1 room, 2 rooms, each of them with a separate toilet, bathroom and kitchen. I am talking about those houses where the investor targets the younger renters, the bachelors and spinsters who can pay for such services, here you try to get into their habit and reason the way they reason, there is usually an emphasis for fast lifestyles here, the people in this age group are usually educated and has a wide range of choices. If you arrange with them, they can pay you to install additional features like cable TV, internet access, security, water supply and in some cases, a kitchen to serve them meals. The only difference between the self contain and the student hostel is the size, most students hostels are one room apartments while self contain apartments have more than one room.

Re: The Business And Profitability Of Rental Properties by spyder880(m): 12:26am On Jul 25, 2011
Renting student’s hostels

Let us not delve into the details why our schools cannot provide hostels for their students, that is not the point of this study, our mission here is to identify business opportunities and exploit them where possible. This brings us to bridging the gap in students accommodation needs.
Students are usually younger men and women who are still dependent on their parents and relatives for financial and material provisions and as such may not be rich enough to pay for bigger apartments. An ideal student renter is looking at gaining accommodation to a single room apartment where they can read their books in solitude and socialize with friends. Students always like to live together in a compound of their own because living in a compound where other families live can pose problems like trying to explain their action to other people from different age ranges that may not understand their way of life as students. Students also like to live together to share friendships, study together and share information about their schools and school problems.

Re: The Business And Profitability Of Rental Properties by spyder880(m): 12:49am On Jul 25, 2011
more hostel

Re: The Business And Profitability Of Rental Properties by spyder880(m): 12:54am On Jul 25, 2011
Renting rooms

This is for the very poor who cannot afford to live in flats, here you expect trouble as everyone is ready to fight everyone, families fight families for the slightest provocation like children fighting. Kid’s fights can easily degenerate into adults fighting and it could get worse and become a free for all fight in the compound. (Ask me, I have been settling these kinds of wahala) Police case is not strange here. These people seem to want to take out their frustrations on each other. As an investor, am concerned about rents, these people mostly default in paying rents as and when due telling stories of hardships, they are usually made up of okada riders, barrow pushers, taxi drivers, laborers, bus conductors and they have uncontrolled child bearing. I was born in this type of house and grew up there; it’s not a funny experience at all. Try to visit a face-me-i-face-you compound and see things for yourself.
Renting these apartments is surprisingly profitable as many still pay after defaulting. I found out that the demand for this type of house is very high as even the poorest can afford to rent a room. Some owners of this type of house are never bothered with maintaining the house because the tenants are mostly ignorant and are used to just surviving even under the most non conducive atmosphere.

2 Likes

Re: The Business And Profitability Of Rental Properties by spyder880(m): 1:04am On Jul 25, 2011
more rooms

Re: The Business And Profitability Of Rental Properties by spyder880(m): 1:08am On Jul 25, 2011
In conclusion.

Please note that as a prospective investor, you have to know what you want to do with your land before you even start to look for the land to buy. You cannot rent face me I face you rooms in areas where the rich live as most poor renters will find the cost of living too severe there. The services are for the rich, the environment is structured to favor the rich and so the poor man will not fit in. the cost of land there will be so much that it will take forever and one day before you could recover your initial investment.
If you buy a land in an area where poor people live, chances are that you may never attract rich renters who can pay good rents. Rich people like to live together and as such if you are going to build for the rich, look for land in areas where rich people live. The rich want the best of schools for their kids, super shops, restaurants and eateries, good scenery and a place to exercise.
Re: The Business And Profitability Of Rental Properties by spyder880(m): 1:11am On Jul 25, 2011
Where I come in.

I am ready partner with prospective investors who wants to own a property in Enugu, I will help locate and purchase a land where you could build you dream house either commercial or private property. We currently have assorted lands in several locations of town in different price ranges. I can help you build the house after you have perfected the title documents in your own name and obtained all the necessary permits and even help select the best of tenants to live in your house should you decide to rent. I will discuss the profitability of each type of rental property for those interested in partnering with my team to provide the most competitive services in the industry. Call me on 08033350750 or send an email to ckenneths@yahoo.co.uk for further inquiries.

I will write about commercial properties like office blocks, open stalls, shops, stores and warehouses next time, bye for now.

1 Like

Re: The Business And Profitability Of Rental Properties by Fhemmmy: 1:47am On Jul 25, 2011
How about you putting some sample figures of how much to invest and how much to realize in a year on the investment and the maintenance cost as well per year , , , ,that will make it easier investors to know what they are looking at.
Please feel free to use your hood of specialty as a sample

1 Like

Re: The Business And Profitability Of Rental Properties by spyder880(m): 5:25am On Jul 25, 2011
Fhemmmy:

How about you putting some sample figures of how much to invest and how much to realize in a year on the investment and the maintenance cost as well per year , , , ,that will make it easier investors to know what they are looking at.
Please feel free to use your hood of specialty as a sample


Yes, I will do that soon.
Re: The Business And Profitability Of Rental Properties by diordaves(m): 10:03am On Jul 25, 2011
It is advisable that builders demand for lifts to be installed in such high rise buildings to aid ascent and descent. It will be very useful in periods of emergencies like fire outbreaks.


DO NOT USE USE THE LIFT DURING FIRE OUT-BREAK: IT IS A DEATH TRAP.

Nice one spyder880.

1 Like

Re: The Business And Profitability Of Rental Properties by Nobody: 11:49am On Jul 25, 2011
Subscribing very fast
Re: The Business And Profitability Of Rental Properties by shawonlese: 11:52am On Jul 25, 2011
For me, the only thing profitable in rental business is an hostel and guest house.

Why? they are never sitting tenants.

2 Likes

Re: The Business And Profitability Of Rental Properties by blank(f): 11:59am On Jul 25, 2011
Na this kain thing i like.
Re: The Business And Profitability Of Rental Properties by Welder(m): 1:53pm On Jul 25, 2011
Very informative. . .
Re: The Business And Profitability Of Rental Properties by Delta007(m): 1:58pm On Jul 25, 2011
Apart from renting in Abuja or Lagos and maybe PH, renting in other parts of the country will give you very low returns; may not be worth it when you factor in opportunity cost. Just my two cents!
Re: The Business And Profitability Of Rental Properties by Fhemmmy: 2:13pm On Jul 25, 2011
spyder880:

Yes, I will do that soon.

Kool
Re: The Business And Profitability Of Rental Properties by kcoolk4: 4:07pm On Jul 25, 2011
Long time no hear spyder880. Good job you are doing here. Like Diordaves has rightly said, please don't advise people to use elevator during fire outbreaks ooo, Dat na disaster waiting to happen. In fact, in medical field and all advanced countries, they advise you to use stairs. Apart from that, I'm enjoying this new thread. Keep on.
Re: The Business And Profitability Of Rental Properties by rastaman20(m): 5:24pm On Jul 25, 2011
Buisness don start ooooo.

where are the investors, ??

Here to learn again as usual.

Good thread@spyder880
Re: The Business And Profitability Of Rental Properties by lanrelagos: 6:02pm On Jul 25, 2011
GOOD JOB
THANKS

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