Short-term rentals are booming in Lagos’ property market, owners explain how it is done

Michael Obot found himself at a crossroads after acquiring two four-bedroom duplexes on Olu Akerele Street, off Awolowo Way, Ikeja, with plans to occupy them.

However, his circumstances changed, and the properties sat vacant, leading to mounting maintenance costs.

“I bought these properties to live in, but for some reason, I didn’t move in,” Obot explained.

Faced with the expense of maintaining the duplexes, Obot decided to explore short-term rentals as a solution. Among the various platforms available, he opted for Airbnb, a popular choice for short-term bookings.

“Rather than leave the properties idle or lease them out long-term, I thought Airbnb could help me cover the maintenance costs while earning some profit,” he shared.

Now, two months into hosting, Obot has gained firsthand experience in Lagos’ burgeoning short-term rental market.

This ThePressNG feature explores whether platforms like Airbnb are indeed a smart investment for real estate investors in Lagos, a city where short-term rentals are increasingly seen as an attractive business model.

Short-term rentals have gained popularity due to their flexibility for both hosts and guests. Unlike long-term leases, hosts can adjust availability and pricing based on demand, while guests enjoy personalized options that hotels may not offer.

In Lagos, a bustling hub for business and tourism, short-term rentals are becoming a preferred alternative to traditional hotels, offering more space and privacy.

Many find them to be more affordable, especially for longer stays or larger groups, making this business model attractive for property owners.

ThePressNG spoke to experienced hosts, including Michael Obot and Amb. Badejo Moyosore, Chief Operating Officer of Deity Homes Int’l Limited, for insights on starting a short-term rental business.

Both emphasized the need to first secure a property, whether through purchase, lease, or inheritance. Obot repurposed his duplexes for rentals, while Moyosore convinced his parents to leverage their properties across Lagos.

Obot also registered his business with the Ikeja Local Government, paying N400,000 for certification, and informed the nearest police station for added security.

Both hosts stressed the importance of business registration for credibility. Moyosore went further, obtaining a Special Control Unit against Money Laundering (SCUML) certificate from the Economic Financial Crimes Commission (EFCC)  to operate a corporate account in compliance with anti-money laundering regulations.

Obot, though unaware of SCUML, mentioned that he followed security protocols and Know Your Customer (KYC) checks before opening his corporate account.

Location is key to the success of short-term rentals in Lagos. Ikeja thrives due to its proximity to the airport, central location, and entertainment options. Other notable mainland areas include Surulere, Magodo, Festac, Gbagada, and Yaba. On the Island, Lekki, Ikoyi, Victoria Island, and Ajah are popular choices.

Equally important is setting the property to a high standard, with quality finishing, interior decorations, and entertainment options like TV, streaming services, and even games. The aim is to create a homely yet luxurious space for guests.

Hosts must carefully select guests to protect their property. Generally, only two people should occupy each bedroom. For example, a one-bedroom flat should house no more than two guests, while a three-bedroom apartment may accommodate four to five. This prevents overcrowding, which can lead to damage.

It’s also common for hosts to perform KYC checks, requesting valid ID, contact details, and the reason for staying. Both Obot and Moyosore agree this helps ensure the responsible use of the property and adds security.

Setting up a short-term rental can be capital-intensive. Obot mentioned spending about N15 million to furnish his four-bedroom duplex to executive standards, equipped with all the necessary amenities to attract high-end guests.

Amb. Badejo Moyosore explained that he bases his pricing on daily operational costs.

“I break down every expense—whether billed monthly or yearly—into daily figures,” he said.