Short-Let or Long-Term Rental: Which Earns More in Lagos?

Landlords in Lagos increasingly ask whether to let a property on a yearly tenancy or run it as a serviced short-let. The honest answer is that one is a higher-yield business and the other is a lower-effort income. They are not the same product.

How a long-term tenancy works here

The Lagos convention is rent paid in advance, commonly a year at a time. That gives a landlord a lump sum, a single tenant to deal with, and long stretches with nothing to manage. Your costs are periodic maintenance, agency fees and the occasional void between tenants.

The trade-off is that your rate is fixed for the term. In a market where costs move quickly, a rent agreed twelve months ago can look thin by the time it is renewed.

How short-lets work

A serviced apartment is let by the night or the week, furnished and equipped, usually to business travellers, visitors and people between homes. Because you are re-pricing constantly, you capture demand peaks a fixed tenancy cannot.

What it costs you: furniture and equipping the unit up front, cleaning and laundry between guests, utilities and internet, listing and payment fees, maintenance at a much higher frequency, and someone to handle check-ins and guest problems.

The comparison that matters

	Long-term tenancy	Short-let
Gross yield	Lower	Higher in the right location
Running costs	Low	Substantial
Setup cost	Minimal	Furnishing and equipping
Income pattern	Lump sum, predictable	Variable, seasonal
Vacancy risk	Between tenancies	Constant, managed by pricing
Management	Occasional	Daily
Suits	Hands-off owners	Owners wanting yield, with an operator

Note the word gross. A short-let advertising a much higher nightly rate can end up level with a yearly tenancy once cleaning, utilities, void nights and management are taken out. Compare net, not headline.

Location decides it

Short-lets work where there is a reason to stay a few nights: business districts, areas near corporate offices, places people visit. A property far from any of that will sit empty between bookings and would have earned more on a yearly tenancy.

If you are abroad

Short-letting is a hospitality operation, not a passive investment. Guests arrive at odd hours, things break, and someone has to be reachable. Run remotely without a manager on the ground, it fails. With a manager, it can comfortably outperform — which is the whole reason property management exists as a service.

Scotch Stone operates serviced short-stay apartments and manages property on behalf of landlords. If you are weighing this up for a specific property, ask us to look at it.