Real estate experts indicate that rental income in Nigeria remains low, typically falling between 3% and 5%.
This situation is largely attributed to economic difficulties that hinder tenants from affording higher rents, along with the prevalence of informal rental agreements. Additionally, the absence of efficient rental systems in various regions of the country has further diminished the income potential for property owners.
In response, real estate developers are seeking innovative strategies to boost rental yields. Olufemi Seyi, CEO of Casafina Development, recently introduced a new housing project in Anthony Village, Lagos, aimed at providing better returns for investors.
Seyi noted that rental income from properties in prime locations can yield returns of 10% to 15%, and in some instances, even reach 25% annually.
The project, featuring 24 one-bedroom apartments, is anticipated to generate considerable interest, with Seyi projecting that investors could achieve an annual rental income of up to N6 million, especially through short-term leasing. The development boasts modern amenities, including armed security, a 24-hour water supply, and various features aimed at attracting both tenants and investors.
Similarly, estate surveyor Olorunyomi Alatise noted that although rental yields are currently low, real estate in Nigeria continues to be a sound long-term investment. He highlighted that capital appreciation, particularly in prime areas, presents significant opportunities for property owners. As urban areas grow and infrastructure develops, property values typically rise, making real estate a reliable safeguard against inflation and currency depreciation.
Despite the challenges in the rental market, industry professionals remain hopeful about the prospects for increased returns through strategic investments.
