Why I Think Airbnb Is a Bad Real Estate Investment in Lagos (Unless You’re in the Right Location)
For the past few years, Airbnb and short-let apartments have been marketed as the ultimate real estate investment in Lagos.
Many developers now advertise new projects using promises like:
- “Earn ₦15 million annually.”
- “Higher returns than traditional rentals.”
- “Passive income every month.”
While these promises sound attractive, they don’t tell the whole story.
Based on what I’ve observed in the Lagos property market, Airbnb is not the right investment for most people—unless your property is strategically located in a high-demand area.
Here’s why.
1. Occupancy Is More Important Than Nightly Rate
Many investors focus on charging ₦120,000 per night.
The real question is:
How many nights will the apartment actually be occupied?
A short-let apartment earning ₦120,000 per night but occupied only 8–10 nights a month may generate less income than expected once expenses are deducted.
Cash flow comes from consistent occupancy, not simply a high nightly rate.
2. Supply Has Increased Faster Than Demand
A few years ago, relatively few apartments operated as Airbnb units.
Today, many new developments are specifically designed for short lets.
As supply continues to grow, owners increasingly compete by:
- Reducing prices
- Offering discounts
- Spending more on marketing
- Improving interior design just to stand out
More competition often means lower profit margins.
3. Operating Costs Are Higher Than Many Investors Expect
Unlike long-term rentals, Airbnb properties require ongoing operational expenses.
These include:
- Cleaning after each guest
- Laundry services
- Staff or property managers
- Internet subscription
- Electricity
- Fuel or diesel
- Repairs and maintenance
- Replacement of damaged furniture and appliances
- Booking platform commissions
Many investors underestimate these recurring costs when calculating returns.
4. Guest Expectations Continue to Rise
Guests no longer compare your apartment with nearby rentals.
They compare it with hundreds of listings available online.
If your property doesn’t offer exceptional cleanliness, reliable power supply, attractive interior design, and excellent customer service, guests may choose another listing.
Maintaining high standards requires continuous investment.
5. Location Determines Success
This is where many investors make expensive mistakes.
Buying an apartment simply because it was marketed as “Airbnb-friendly” does not guarantee bookings.
Successful short-let properties are usually located close to:
- Victoria Island
- Ikoyi
- Lekki Phase 1
- Oniru
- Ikeja GRA
- Areas with strong corporate demand
- Tourist attractions
- Business districts
- Event centres
- Major transport hubs
Properties located far from these demand centres often experience lower occupancy, regardless of how beautifully furnished they are.
6. Long-Term Rentals Can Be Less Stressful
Many investors overlook the benefits of traditional rentals.
With long-term tenants, you typically enjoy:
- Predictable annual rental income
- Lower management costs
- Less wear and tear
- Reduced vacancy
- Fewer operational headaches
For some investors, lower stress and stable income outweigh the possibility of higher—but less predictable—short-let returns.
So, Is Airbnb a Bad Investment?
Not necessarily.
Airbnb can be an excellent investment when three key factors align:
- Prime location
- Strong year-round demand
- Professional management
Without these, many investors struggle to achieve the returns they were promised.
Final Thoughts
Before buying any property because someone says it is “perfect for Airbnb,” ask yourself:
- Who is my target guest?
- Why would they choose this location?
- What is the average occupancy rate?
- What are my monthly operating costs?
- How many nights must I book each month just to break even?
Sometimes, the smartest investment isn’t the one with the highest projected income—it’s the one that delivers consistent, sustainable returns over the long term.
About Nexora Homes
At Nexora Homes, we help investors evaluate real estate opportunities based on long-term value, realistic returns, and market demand—not just marketing promises.
If you’re considering buying property for rental income or Airbnb, we’d be happy to help you assess whether the numbers truly make sense before you invest.