Different Models, One Goal. Serviced Apartments or Rent/Lease?
What's best for investors?
Kayode Ikupolati
2/17/20253 min read
1. Introduction
For a long time, renting or leasing property was considered the best way to make money from property ownership in Nigeria. Even in top cities like Abuja, renting was the predominant way to make money from property investments. However around the turn of the decade, the real estate market experienced a turn of events. First, investors began to copy the ‘AirBnB’ model which was common in Europe and the United States. The model was simple – it offered a hybrid between rent/leasing and luxurious hotel services – it accommodated people at a charge not higher than hotels while still maintaining an idea of luxury, only seen at hotels at the time. It simply made sense as a visitor to rent a serviced apartment which was more flexible, cheaper than a luxury hotel and more convenient. A lot of buyers and investors suddenly were in top cities like Lagos and Abuja looking for properties which they could buy and convert to serviced apartments.
2. New and Intriguing
Like every other disruptive idea, the serviced apartment model was new and intriguing. This model intrigued investors because unlike rental properties which were one upfront payment with a rate of around 3.5%-7% profit margin per year, serviced apartments offered around 10%-20% profit annually. Around 2020-2022, serviced apartments surged in popularity and became the de-facto choice for visitors to top cities in Nigeria. This was further heightened by the ‘Detty December’ trend every December, which saw an influx of Nigerians based overseas who had the resources to pay for these apartments. It was simply a win-win situation and it seemed there was now a model which satisfied investors and visitors alike. During this boom, the quality of serviced apartments continued to grow and many investors found it a more profitable endeavor than the traditional rent/lease system.
3. Trends
In 2024, cracks began to show – serviced apartments had become so luxurious and clients began to complain of the high fees. Even visitors during the Detty December period began to lament the random price hikes during the period. The high prices and sometimes ridiculous charges became a cause of concern. On the other hand, property managers complained that the damages done by visitors were usually expensive and costly to fix or repair. It was clear that this model might have its own challenges. Nonetheless, business went on and the model was still largely reported as being profitable. In Abuja, the (un)official headquarters of serviced apartment seems to be Jahi. It houses a good portion of the most luxurious and in-demand serviced apartments in the capital city.
3. What Model is Best for You?
Well, understanding what’s best for you as a potential investor is a cocktail of elements. It largely depends on the needs of the investor. For an investor who has a lot of cash to spare after acquisition, the serviced apartment model could be a great choice because the cost of interior decoration and fittings are pretty much on the high side. Another consideration would be the level of effort and oversight the investor is ready to spare, but this could be easily handled opting for a management company or firm which will be responsible for day-to-day operations. Finally, unlike the rent model which shifts most of casual maintenance to the tenant, the serviced apartment model requires regular maintenance from the investor to match market standards.
Conclusion
The model which works best varies from one investor to another, but one thing is sure - investing is property is a tested and trusted form of investment and while it may evolve and experience new trends, it's not going away anytime soon.
info@senovixurbanrealty.com
© 2026 Senovix Urban Realty. All rights reserved.