I remember when a long-time associate called us in frustration.
He had just finished setting up a beautiful shortlet apartment in Lekki. Everything was perfect. But after six months, the numbers didn’t match what he expected:
- Bookings were inconsistent.
- Guests damaged furniture twice.
- The income he imagined was nowhere close to reality.
This is a story we don’t hear often, but they do happen.
Short-term property investment has become very popular in Lagos.
But many investors assume they can buy an apartment, furnish it, list it online, and start earning large returns immediately.
But the truth is more complicated.
TL;DR
If you’re in a hurry, this table presents the 10 problems discussed in this article, along with solution. But you’ll better understand them by reading on.
| Problem With Shortlet Investment | Solution(s) | |
| 1 | High initial setup cost | Plan your setup budget carefully before starting. |
| 2 | Inconsistent bookings | Run ads & diversify where you list your property. |
| 3 | Guest damage | Refundable caution deposit fee of at least 20% of the actual rent |
| 4 | High operational cost | Track every operational cost from the beginning. |
| 5 | Difficult guest | Clear rules and communication. Hiring a property manager works, too. |
| 6 | Regulatory restrictions | Due diligence before investment |
| 7 | Security concerns | Smart locks, identification verification, and collaboration with estate security |
| 8 | High competition | Unique interiors, better service, and location matter. |
| 9 | Dependence on bookings | Leverage social media |
| 10 | Unmet earning expectations | Manage expectations with proper accounting |
Make no mistake, Shortlets can be profitable.
I’ve seen investors make very good money from them. But I’ve also seen many people struggle because they didn’t understand the challenges they would face before entering the market.
If you’re thinking about investing in a shortlet property in Lagos or anywhere in Nigeria, you need to understand the problems first.
What Exactly Is Shortlet Property Investment?
A shortlet property is a furnished apartment rented out for short-term stays rather than long-term tenancy.
Instead of a tenant paying rent for one year, guests pay for a few days or weeks.
These properties are usually booked by:
- Business travelers
- Tourists
- Diaspora visitors returning to Nigeria
- People attending events or weddings
- Professionals staying temporarily in Lagos
- Young people who want to chill.
At RentHouseSurulere, since we mainly operate in Lagos, we’ve seen shortlets grow quickly because hotels are expensive and many visitors prefer private apartments.
But higher potential income comes with higher complexity.
Is Shortlet Property Investment Really Profitable?
Yes, it can be.
But profitability depends heavily on three things:
- Location
- Occupancy rate
- Property management
If your apartment stays booked most of the month, the income can outperform long-term rent.
But if bookings are irregular, the numbers start falling quickly.
That’s why understanding the risks matters.
10 Problems With Shortlet Property Investment
Let’s start with the obvious one.
1. High Initial Setup Cost
The first shock most investors face is the cost of setting up a shortlet.
Unlike normal rental apartments, shortlets must be fully furnished.
You’ll need:
- Beds and mattresses
- Sofas
- Television
- Refrigerator
- Microwave
- Kitchen utensils
- Air conditioning
- Generator or inverter
- Interior decor
By the time everything is ready, furnishing alone can cost millions of naira.
I’ve seen investors spend almost as much on furnishing as on the apartment itself.
The Solution
Plan your setup budget carefully before starting.
Focus on durability rather than luxury. Guests care more about comfort and cleanliness than expensive decor.
Start with essential items first. You can upgrade gradually as revenue grows.
2. Inconsistent Occupancy
This is one of the biggest realities of shortlet investment.
Unlike traditional rent, income is not guaranteed every month. Some months are busy. Others are slow.
For example, demand often increases during Detty December and major events in Lagos. But outside those periods, bookings can drop.
If your apartment stays empty for two weeks a month, your revenue immediately drops.
The Solution
Diversify where you list your property.
Don’t rely on only one platform. Use multiple booking platforms and social media channels.
Pricing strategy also matters. Sometimes, reducing the price slightly can improve occupancy and increase overall monthly income.
3. Guest Damage
When strangers frequently stay at your property, damage is almost inevitable.
I’ve seen cases where guests broke televisions or damaged kitchen appliances. Even responsible guests sometimes misuse equipment because they are unfamiliar with it.
The Solution
Protect yourself with a damage policy.
Require a refundable caution deposit. Conduct quick inspections after every guest checks out.
- A good amount for a caution fee is 20% of the actual rent.
Many property managers already have this in place. But it’s still worth mentioning.
Also, avoid fragile furniture and expensive decorative items that are difficult to replace.
4. High Operational Costs
Unlike long-term rentals, the apartment must be cleaned after every guest leaves. Bedsheets must be washed. Toiletries must be restocked.
Electricity bills can also increase because guests often leave appliances running. Internet subscription, security, and repairs all add to operating costs.
Many investors underestimate these expenses.
The Solution
Track every operational cost from the beginning.
When calculating potential income, always subtract expenses such as cleaning, electricity, maintenance, and platform fees.
Real profit only appears after these costs are accounted for.
5. Difficult Guests
Managing guests is one of the most stressful parts of the shortlet business.
You may encounter guests who:
- check in late at night
- make noise complaints from neighbors
- misuse facilities
- argue over rules with your caretaker
Handling these situations can be exhausting if you manage the property yourself.
The Solution
Create clear house rules.
Guests should know what is allowed and what is not before booking.
Some investors prefer hiring professional managers to handle guest communication. This is also worth trying too.
6. Regulatory Restrictions
Shortlet operations sometimes face restrictions from property owners or estate management.
Some residential estates do not allow short-term rentals because of security concerns.
- It was barely a month ago when the Banana Island Property Owners and Residents Association, Lagos (BIPORAL), banned short-let operations across the community following a recent security breach linked to suspected criminal activity.
Local authorities can also introduce regulations that affect operations.
The Solution
Confirm estate policies before buying property for shortlet use.
If the estate prohibits short-term rentals, your investment could become unusable.
Always verify these rules early.
7. Security Concerns
Shortlet properties host different guests regularly. This can create security concerns for both property owners and neighbors.
Without proper checks, unknown individuals may access the building.
Some property owners also worry about theft or misuse of their apartments.
The Solution
Install basic security measures.
Smart locks, identification verification, and collaboration with estate security help maintain control.
8. High Competition in Popular Areas
Areas like Victoria Island and Lekki already have hundreds of shortlet apartments. Even the mainland areas that you think are underserved now have many shortlets.
When too many properties compete for the same guests, prices begin to drop.
New investors sometimes enter these areas without realizing how crowded the market has become.
The Solution
Differentiate your property.
A unique interior design, excellent service, and a good customer experience can make your apartment stand out.
In these situations, referral is your strongest marketing.
9. Dependence on Booking Platforms
Most shortlet properties depend heavily on platforms like Booking(dot)com or Hotels(dot)ng.
These platforms control visibility through their algorithms.
If your listing receives negative reviews or loses ranking, bookings can drop quickly.
Platform fees also reduce profit margins.
The Solution
Go full throttle on websites or social media pages (especially TikTok and Instagram). These allow repeat guests to book directly without platform fees.
10. Unrealistic Profit Expectations
This might be the most common mistake.
Many investors assume shortlets will automatically generate huge monthly income.
But when occupancy drops or expenses increase, expectations quickly change.
Shortlet property is still a business. Like any business, it requires effort, planning, and patience.
The Solution
Do realistic financial projections before investing.
Estimate average occupancy rather than assuming full bookings every month.
Final Thoughts
Shortlet property investment can be profitable, but it is not as simple as many people believe.
If you really think about it, you are actually running a hospitality business.
That means managing guests, maintaining property standards, handling bookings, and controlling costs.
As an investor, approaching shortlets with realistic expectations and proper planning can generate solid returns.
Why Many Investors Work With RentHouseSurulere
Finding the right property is one of the most important decisions you will make in real estate.
Many shortlet investors struggle not because the business model is wrong, but because they bought property in the wrong location or without proper guidance.
This is where experienced property professionals make a difference.
We’ve built a strong reputation helping investors identify high-potential properties across Lagos.
Whether you want to:
- Buy property for shortlet investment
- Long-term rental
- Land banking
We provide guidance that helps you make informed decisions. Simply send us a WhatsApp message.
