It’s no longer news that Nigeria is in a recession .The effects are being widely felt nationwide in virtually all economic spheres and by all income classes.

One area that has not seen much respite as a result of the economic realities is in the area of rental accommodation.

Firstly, I must state at this junction, that things have actually evolved over-the-top last decade in the commercial housing sub-sector of the construction and real estate economic segment.

In the distant past, it was not uncommon for middle income families to rent 4 bedroom apartments for accommodation. Several commercial developments had 4-bedroom apartments as firm fixtures.

Fast forward to today, and even 3 bedroom apartments are becoming less common in favor of 2-bedroom apartments as the standard family accommodation sought by the urban middle class, especially in Lagos state.

The reasons behind this major shift are 2-fold.

The prices of rental accommodation have skyrocketed (and keeps progressively growing in spite of concerted government policy), and this has led to a general preference shift from bigger to smaller sizes of housing as space becomes priced at a premium
Families are decidedly getting smaller, and 4-person families consisting of father mother and 2 children is becoming the norm in the urban space.
These factors represent a trend which does not seem will change any time soon. Therefore, it is smart for investors to begin analyzing how to benefit from this trend particularly where the economic downturn has made other legitimate investment destinationss infinitely more risky.

A situation where families are finding 2-bedroom apartments more palatable as a result of steep space pricing, a gap in the market presents itself in the form of one bedroom apartments .

Unmarried urban workers, singles, and those residing apart from their families often require suitable accommodation as well in the urban metropolis. The astronomical cost of a 2-bedroom option has meant either sharing a flat with others or simply opting for accommodation in the seedy parts of town where face-me-i-face-you and other combinations of housing are available at cheaper rates.

For an upwardly mobile young worker, such options may be unpalatable. Hence the springing up of the one-bedroom apartment option surreptitiously all over town which includes every modern accoutrement to satisfy the yearnings of such an increasingly common demographic.

One bedroom apartment rental rates vary depending on location, quality  and amenities. In the outskirts of Lagos, Abeokuta, Ijebu, Ibadan, etc, a modern one-bedroom apartment  rents for between 120k and 180k (depending on modernity and style of finish), while the same high standard that went for 180k in Ibadan, will go for not less than N1m per annum in Lekki phase 1, Lagos state. 

The value of land plays a big role in pricing parameters.  An average plot of land in lekki phase 1 ranges from N90m upward while the same size of plot in several areas in Ibadan or Mowe retails for under N5m. 

When we adjust for land price though, the rental value of a one bedroom apartment strangely seems to gold steady in various locations sampled. It is virtually a fact that rental value for modern one bedroom apartments in all the locations identified above is NOT below N150k per annum! 

Therefore, the feasibility of a N900kinvestment in one bedroom rental accommodation seems a near certainty, provided the following conditions are net. 

We can find an appropriately located plot of land within a high population area, accessed by good roads and with access to the key infrastructure like electricity and water, for N2m or lessWe can design a multiple unit residential development of one bedroom apartments, which effectively reduces the cost of constructing-to-finish  each apartment at a total cost of not more than N900k each. 

The good news is that these parameters have been satisfactorily fulfilled in our scheme. 

OWN A ONE BEDROOM APARTMENT IN MOWE (NEAR REDEEMED CAMP) FOR N900K.

The scheme consists of 10 units of one-bedroom apartments in Sim Estate Mowe, and N900k only, entitles an investor to ownership of one of the units. 

This apartment can be possessed by the owner, or rented out at not less than N150k per annum. 

Details of this project will be communicated in subsequent articles.

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