You may have heard the word shortlet apartment or short-term rental apartment randomly and you seem not to understand what it means. Well, this post will explain it to you, and how you can get involved in this Real-Estate investment opportunity.

Most building owners/landlords are conversant with traditional long-term rental opportunities for residency, commercial or industrial use but not short-term basis. The most popular short-term residential rentals are seen in the hospitality area like hotels.

Now let’s look at what shortlet means.

Table of Contents:

 

What is a Shortlet apartment?

A shortlet apartment is a fully furnished, residential apartment, open to short-term rentals from the public, usually ranging from 2 weeks to 6 months. These apartments contain basic spaces for a standard apartment which includes a living area, dining, kitchen, bedrooms, toilets, bathrooms, and laundry facilities.

The apartment is fully equipped such that what the guest renting the space is required to do is come with their clothes and personal belongings. They use the available spaces as they desire without any restrictions.

They cook their own meals or order meals from local food vendors if they wish. They do their laundry by themselves or send their dirty laundry to a laundry man. They clean their spaces or a cleaner is hired for them.

They generally do not have the kind of rules that affect a guest renting a regular hotel room. These apartments are in high demand due to the increasing need for temporal accommodations for vacations or business travelers.

In Nigeria, shortlets apartments are popular in cities like Lagos, Abuja, Kano, and Port-Harcourt. The popularity of shortlets is gradually spreading into other cities as people desire to network and experience less busy environments.

Types of Shortlet Apartments.

There are different types of apartments for short-term rentals. It could be a bungalow, storey building, duplex, or multi-plex. The spaces could be;

  1. A studio apartment (what we call a self-contained room).
  2. A one-bedroom (that is a separate bedroom and a separate living room).
  3. A 2 or 3 bedroom.
  4. A duplex or multiplex consisting of any number of bedrooms.

Benefits of Owning a Shortlet.

There are many benefits of owning short-term rentals. This includes a higher rental income compared to regular annual residential rentals. It diversifies your income streams. You also have greater flexibility in how quickly your apartment becomes available for the next rental.

You get to network, meet and have access to a wide range of guests from business travelers, to tourists, and even people who are relocating to, or out of your town.

It’s also beneficial to you, as the owner, especially if it is located in a different state from where you are based in. It serves you as a vacation home when not rented out.

As a taxpayer, there are tax benefits associated with property expenses, depreciation, and others. Your tax adviser/professional should be able to relate how you can benefit from this.

This also helps with social impact. By providing affordable and comfortable accommodation short-stay options for travelers and tourists, you also contribute to the growth of tourism and support for local businesses around your apartment.

The Downside of Owning a Shortlet.

The prospects of making a high rental income can be intriguing but don’t forget that the high turnover rate of guest rentals will cause more wear and tear on your property. You will need to provide funds for upgrades, maintenance, replacements of items, or painting.

You will also need to constantly manage your bookings and guests which you may be too busy to handle. You may need to hire a property manager to help you with this, which will reduce your earnings. You will also need guest screening criteria to safeguard your property as guests move in and out of the apartment.

How to Invest in a Shortlet?

There are two ways to invest in this real-estate opportunity. This includes:

  1. By setting up the apartment with all furnishing requirements, marketing, and managing it by yourself.
  2. By using a Shortlet Real-estate Agency to manage the apartment for you.

Should you choose to manage the apartment by yourself, here are the steps to go about it.

1. Choose a good location:

Your location should be within or around the city centre or a little off the centre. People want to stay around the business area of the city they are taking up accommodation in.

2. Furnishing and design:

You will need the services of an Architect or an Interior Designer to design the interior space of your apartment. If you do not have any, you can use this form to contact us. For furniture, you can decide to spend the money required to purchase them upfront, or you can use furniture rental companies like hotels do.

3. Pricing:

You need to check around your area and decide on the best pricing that will yield profit for you and remain affordable for your guests. Shortlets go for as high as N80,000 per night for some places in Lagos, but you might be in a less popular state and cannot go with such a price. Use hotel prices around your locality as a guide.

4. Marketing strategy:

How do you intend to get people to know you have a shortlet open for rentals? Is it by word of mouth, radio advert, or online marketing? Do you have a unique feature of your property that makes yours different from others? Decide on this before you start.

5. Management and screening criteria:

You will need to decide how you manage your guests and bookings. Do you need to hire staff for that? How do you control guests moving something from your property?

6. Legal requirements:

This depends on your locality. You will need to find out the taxes and permits required to operate your shortlet before you start anything.

7. Housing Insurance:

Disasters ranging from faulty electrical wiring, or a guest staying in your shortlet, may mistakenly set your apartment on fire, or break something which requires a painful expense on your end. Setting up insurance to cover these types of damages will save you a lot of headaches in the long run. 

In conclusion, if you have an extra apartment within your plot that is not in use, instead of waiting for long-term residential rentals to take up the space, upgrade the interior and market it for shortlets.

Do you have a plot of land, and do you want to develop it with shortlet apartment designs? Reach us here.