According to experts in the real estate sector, rental income in Nigeria continues to be relatively low, typically ranging between 3% and 5%. This is primarily due to economic challenges that limit tenants’ ability to afford higher rents, as well as the informal nature of many rental agreements. The lack of efficient rental systems in several parts of the country has further impacted the income potential for property owners.
However, real estate developers are now exploring new approaches to increase rental yields. Olufemi Seyi, CEO of Casafina Development, recently unveiled a new housing project in Anthony Village, Lagos, designed to offer higher returns for investors. According to Seyi, rental income from properties in prime locations can deliver returns of up to 10 to 15 percent, and in some cases, even up to 25 percent annually.
The project, which consists of 24 one-bedroom apartments, is expected to attract significant demand, with Seyi estimating that investors could earn an annual return of up to N6 million from rental income, particularly through short-term rentals. The development also includes modern amenities such as armed security, 24-hour water supply, and other features designed to appeal to both tenants and investors.
In a similar vein, estate surveyor Olorunyomi Alatise pointed out that while rental returns remain low, real estate in Nigeria remains a viable long-term investment. He emphasized that capital appreciation, especially in prime locations, offers substantial potential for property owners. As cities expand and infrastructure improves, the value of properties tends to increase, making real estate a stable hedge against inflation and currency devaluation.
Despite the challenges faced by the rental market, industry players remain optimistic about the potential for higher returns through strategic investments in well-located and well-renovated properties.
