Houses where landlords demand Sh2.2 million rent upfront : The Standard

• BBC 05th Nov 2019 12:30:00 GMT +0300

Finding a decent, affordable place to live is a common problem facing young people in many places. But in Nigeria’s booming commercial hub, Lagos, it is almost impossible as landlords demand a year’s rent in advance. For two-bedroom apartments with electricity, close to the city’s main business district on Victoria Island, I was asked for between $11,000 (Sh1.1 million) and $22,000 (Sh2.2 million) upfront. In general, middle-to-high-income housing can cost anywhere between (Sh500,000 and Sh4 million) $5,000 and $40,000 a year. These are amounts of money that few people have available. One explanation for the expensive rent is that the cost of both land and construction is high in Lagos.

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Also, there is a shortage of the type of small properties that people starting off in the rental market tend to prefer. The system of upfront payments suits landlords, but some innovations could start to help renters. Bankole Oluwafemi, a young technology entrepreneur, has managed to secure a loft-style apartment on a serene residential street in Lekki - a fairly affluent neighbourhood. It is a step up from a house he shared with other young professionals. Some people use informal lending networks to get the money - from parents, or saving while staying with relatives, and some firms offer their employees loans. But Mr Oluwafemi managed to afford the place with the help of a digital rental site called Fibre. The online platform allows users to rent properties with just a few clicks. Tenants are given the option of paying monthly or quarterly, which may not seem extraordinary in many parts of the world, but is a potential market-changer here. “Landlords have the authority to dictate what they want from tenants,” Dolapo Olumidire, real estate analyst said.

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After Mr Oluwafemi finished his university degree, he moved to Lagos in 2011, but he was unable to come up with the two years’ rent in advance that landlords at that time were allowed to demand.

Unable to find an affordable apartment in a habitable condition, he slept on the floor of a room with 10 other people. When he later co-founded a technology company, he decided to sleep in his office to avoid renting a home and the associated costs. ‘We take nothing for granted’ “Living in Lagos requires you to not just be a tenant, but in many respects you’re your own local government providing your own infrastructure,” Mr Oluwafemi explains, laughing.

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He is referring to the fact that in addition to the cost of rent, many tenants are also expected to pay for their water and electricity, which can be costly because of the fuel needed for generators. “Fibre didn’t just come with the ability to pay monthly and the flexibility, these apartments come with a minimum standard of quality. According to real estate analyst Dolapo Olumidire, Lagos is largely a landlord’s market. “They have the authority to dictate what they want from tenants,” he says. “They can say: ‘These are my terms. If you don’t like it go somewhere else.”  

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