To rent or to buy - 3 reasons renting can be a better choice irrespective of financial capacity

To rent or to buy - 3 reasons renting can be a better choice irrespective of financial capacity

To rent or to buy - 3 reasons renting can be a better choice irrespective of financial capacity

19th September, 2022

3 minutes, 18 seconds read

In most parts of the world, there is so much prestige attached to owning a home. In a research publication by NOI Polls in 2013, 85% of Nigerians who were surveyed, indicated that they would like to own their own personal houses if they had access to a mortgage. While owning a home may appear attractive to a number of people, renting may be a smarter choice for several reasons. Outside the upfront financial implication that comes with an outright purchase, evolving work and lifestyle cultures can are make renting an accommodation more attractive than purchasing. In this article, we dig into the implications of home ownership across multiple countries, providing reasons why renting could be a better choice for you than purchasing out rightly.

 To start with, the rental cost in most cities is rising as property price continues to surge

Around the world, the rule of thumb in regards to renting an apartment is that a household should spend 30% or even better less than 30% of its annual income on accommodation. In some places in the UK, Australia and US, some households are spending closer to 50% of their annual income on rent, and in Lagos, our research has shown that some households especially in Lagos could be spending up to 70% of their net annual income on rent.

Although 68% of the world’s population currently own their homes as reported by RentCafe, more people across the world are becoming cost-burdened by rent. As property prices continue to surge, more people are less likely to afford to buy their own homes, making renting a more sustainable option. Let’s take a closer look at the other factors associated with home purchases. 

It will cost an average earner in Nigeria almost a lifetime to save up to purchase a property


Buying property is also very expensive and almost impossible for most of the world’s population to afford without aid. In even moderately priced places across the US, it will take median wage earners approximately ten years to save for a 20% down payment, according to Libertina Brandt of Business Insider. According to research from Unison, it will take the average earner up to 12 years to save up the down payment for a property in Columbus, Ohio.

The average earner in San Francisco will need to save for about 40 years, and those timespans extend significantly farther for people who want to reside in even more pricey locations. Even though renters might need to put down a security deposit, it will almost certainly be significantly less than a down payment and closing charges. In Nigeria and across most African cities, it will cost an average earner almost a lifetime to save up to purchase a property, and renting can be more sustainable than purchasing for many people.

Renters don't have to pay property taxes

Outside the initial cost of purchasing a home, there are also annual recurring expenses that are typically borne by landlords. One of such is government taxes and levies on real estate. This can range from stamp duty to annual rental income tax and can significantly push up the costs associated with home ownership. Stamp duty can range from 10% to almost 15% of property value or more in most countries. Even when the owner decides to sell, the gains realized on the asset is also subject to taxes, and can range from nothing to 30% in most countries. Outside the financial burden, the process of administering these taxes is sometimes very complex with very detrimental repercussions for non-compliance. 

Renting provides more freedom and flexibility as to where to live

A research article by McKinsey reported that 35% of the American population across all kinds of jobs, in every part of the country and sector of the economy, including traditionally labelled “blue collar” jobs in 2022, have the opportunity to work from home five times a week. Across the world, the global workplace has evolved. Geographic location, academic qualifications and other traditional considerations for employment are becoming less important and employees now have more flexibility to work from anywhere in the world.


With this trend, renting an apartment for most people may be an ideal decision against buying. With most jobs allowing for remote working, renting provides you with the flexibility to relocate to any country of your choice, without having to bother about disposing of your home or the pain of buying a new home in your new country of residence.

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26th September, 2022

2 minutes, 52 seconds read

Surging Inflation and how it is impacting the Lagos Residential Rental Market

In the last 12 months, Nigerians have referred to the economic situation as very daunting, especially for new renters in Lagos. With inflation surging over 20% in August 2022, the economic climate has not been very favourable for most low to middle-income earners in Nigeria. As the rising cost of goods and services continues to drive people to spend more in exchange for fewer items, Nigerians are constantly looking out for opportunities to cut down their expenses. 

One way we have seen this play out is in regard to new leases. Over the last half year, our interaction with real estate agents in Lagos has shown that existing tenants who before now considered moving to new apartments are reconsidering. The reasons for this move seem obvious. Cost! When we dug deeper, we found out that moving at this time can cost you almost twice what it will take to continue in your current space, and prospective renters have come to this realization. But why is this?

Rent has surged over 20% in the past 12 months.

If you are looking to rent a new apartment, it is most likely that you will spend 20% more for the same type of apartment in the same location than you would have one year ago. For tenants who have stayed long in their old apartment, the percentage increase will likely be more than that. Where the apartment is newer, especially with modern amenities, the additional premium being charged by Developers and Landlords can go as high as 30% or more depending on the location. When considered holistically, this additional rental burden is a major discouragement for people looking to relocate or move into newer apartments.

Agency commission, legal fees and caution deposits can cost as much as 50% of the rent.

In most parts of the world, traditional estate agents' fees range from 0.5% to 5%, depending on the value of the transaction and negotiating power of the parties. In the UK for instance, the range is 0.75% to 3% according to MoveWise, a UK-based real estate advisor. In the US, the commission is usually between 4% to 6%. Across most African cities, the percentage is higher and can range between 5% and 10%. We have found that for residential rentals especially of less than 10m value, most agents usually insist on a 10% agency commission. In some locations around Lagos, they can go as high as 20% for rental properties of less than a million. In addition to this, a 10% legal fee is usually mandatory, and some landlords can charge as high as 20% extra as a caution deposit. The impact of this is that it shoots up the total amount that prospective tenants end up paying for new leases, and has been a major discouraging factor for most prospects.

The additional hassle of moving and settling in can be very daunting in busy Lagos

Relocation costs can make things worse, but outside the financial cost, the hassle that comes with it wears out quite a number of people. Based on a sample relocation cost quote we got from Packmyload and a number of other Nigerian-based logistics companies, it costs a minimum of 150,000 to move furnishing items in a 2-bedroom apartment in Ikeja to Lekki Phase 1. Judging from the average rental price data that we are currently tracking Lekki Phase 1, this means that a prospective renter will need to pay between 5% and 10% of the rent on logistics.

Closing thoughts.

When considered individually, these costs may be insignificant but can sum up to almost the same amount that a prospective tenant is paying as rent, or even more. What has been your experience with renting a new apartment in Lagos? Share with us by sending a DM or commenting on our social media handles. 

If you are looking to rent or buy an apartment or get a shortlet, go to and find properties that meet your requirements. If you are an agent, developer or landlord, visit the signup page on to create an account and advertise your properties.

12th September, 2022

4 minutes, 52 seconds read

Nigeria's Top Residential Locations and what is making them alluring for HNIs

It is no news that the residential housing landscape varies largely across the country. Though Nigeria has remained a low-income country since its independence in 1960, its residential market accommodates projects across all residential classifications with a reputation for hosting some of the world’s most expensive estates. In different buckets across the country, one can find residential estates that cater to the affordable, middle-income, deluxe, luxury and even ultra-luxury segments of the market. What is even more interesting is that Nigeria’s ultra-wealthy locations have consistently made it to the global radar of high-end residential markets, becoming case studies for major real estate teaching institutions across the world, including the University of Reading and Havard Business School. We did a deep-dive on 5 of Nigeria’s ultrawealthy projects, and their allure to investors. 

➢     Rent and sales prices of apartments across Nigeria's ultra-wealthy neighborhoods are typically priced in dollars.

➢     Banana Island in Lagos and Maitama in the FCT, Abuja, houses Nigeria’s top 1% and are reputable for being the playground of High Networth Individuals, Expatriates and Nigeria’s Political elites.

➢     Estates in the top 1% category enjoy rare design and functionality privileges including underground power systems, sewerage and security.

NAF Harmony, the restrained zone for the wealthy in Port Harcourt 

Harmony Estate in Port Harcourt is developed by The Nigerian Air Force Housing and Construction Company Ltd (NAFHCC), a subsidiary of the Nigerian Air Force Holding Company (NAFHC). NAFHCC according to the Nigerian Airforce was set up to provide ‘’affordable post-service houses that are decently finished, functional and accessible to the personnel of the Nigerian Air Force’’  

To date, NAFHCC has built 5 other estates in other parts of the country, including NAF Valley Estate in Asokoro among others. Projects by the NAFHCC are typically 60% occupied by Air Force officers, while 40% are made available for the general public, who are mostly top government officials and expatriates.

The Harmony Estate stands out among other projects in Porthacourt in many ways and is reputed to be one of the most conducive, secure neighborhoods in Port Harcourt with uninterrupted power supply. The average price of a parcel of land in Harmony Estate is ₦133,000 per square meter. The average rental and sales price of a 5-bedroom house in the estate stands at ₦5,000,000 annually and ₦250,000,000 respectively. 

Maitama, the Playground of Abuja’s ultra-wealthy 

The Maitama District is situated in the North-Eastern part of the Abuja Municipality and is bordered to the South by Aguiyi Ironsi Road and to the North by Murtala Mohammed Way. The area is known for its expansive luxury homes that are also notoriously pricey. Despite the investment requirements, Maitama has a good blend of mixed-use with a lot of commercial activity in squares and independent stores, especially along major streets like Gana Street. Several government parastatals including the Nigerian Communications Commission, National Universities Commission (NUC), Independent National Electoral Commission (INEC), Central Affairs Commission, and National Youth Service also have their headquarters in this region.

A few European and Asian embassies, like those of Spain and Belgium, are also located there. Due to its exclusivity, Maitama is notable for being the playground of the ultra-wealthy people in Abuja who buy apartments and houses there. A notable attraction for rich people in Maitama is the IBB International Golf and Country Club located inside the exclusive Maitama Avenue. The most expensive location in Maitama is the Madeira estate, formerly Shell Imani. The average price of land in Maitama is ₦347,000 per square meter. The average rental and sales price of a 5-bedroom house in the estate stands at ₦18,000,000 annually and ₦455,000,000 respectively.  

Asokoro, the rich kids’ domain 

Maitama is another upscale residential location in Abuja that is notable for housing the presidential villa. The region has a mix of residential and commercial usage zones and is home to important landmarks like the World Health Organization, the National Intelligence Agency (NIA), the secretariat of the Economic Community of West African States (ECOWAS) and the ECOWAS Park.  

High net worth individuals and government officials live in this neighborhood reportedly because of its reputation for security. Its western, southern, and northern boundaries are the Central Business District, Garki Phase 2, and Maitama, respectively. Like Maitama, properties in Asokoro are expensive and typically priced in dollars. The average price of land in Asokoro is ₦142,000 per square meter. The average rental and sales price of a 5-bedroom house in the estate stands at ₦11,000,000 annually and ₦350,000,000 respectively. 

Victoria Island, home of the much-revered Eko Atlantic City 

Some of Nigeria's highest-calibre residential developments are located in Lagos's upper-middle-to-high-income suburb, Victoria Island. In addition to numerous streams and lagoons, it borders the Atlantic Ocean in the south, giving several neighborhood projects a view of a lagoon. An upscale neighborhood with easy access to Ikoyi, Lagos Island, and Lekki Phase 1 is Victoria Island. Several embassies are located in the region, which is the main business centre of Lagos.  

Numerous national and international organizations and companies also have their headquarters here. Major commercial developments in Victoria Island include the Nestoil Tower, Churchgate Tower, and Standard Chartered Bank HQ Building, among others. A few sizable leisure and hospitality complexes also include the Twinwaters entertainment Center, Four Points by Sheraton, and the well-known Eko Hotel and Suites. Recently, the area has gained even more prominence, being the home of the popular Eko Atlantic city. The average price of land in Victoria Island is ₦500,000 per square meter. The average rental and sales price of a 5-bedroom house in the estate stands at ₦10,000,000 annually and ₦300,000,000 respectively. 


Ikoyi, more specifically, Banana Island 

Ikoyi, the wealthiest district in Lagos, and arguably the entire country is primarily populated by high-net-worth individuals, including politicians, corporate executives, and foreign nationals. It is the location of some of Nigeria's finest business, hotel, and residential structures, including 4 Bourdillon and the upcoming Cuddle project. Across all property typologies, Ikoyi is notably pricey, making it a location that only the ultra-wealthy in Nigeria can afford. 

Ikoyi's residential developments are frequently valued in US dollars, and some of the most well-known in the neighborhood include Cuddle by Cadwell, No. 4 Bourdillon, Tango Tower, and The Ultimate Apartments. Most importantly, however, Ikoyi also houses Banana Island, Africa’s most expensive residential estate. Based on data that we have on BuyLetLive, the average price of land in Ikoyi is ₦950,000 per square meter. The average rental and sales price of a 5-bedroom house in the estate stands at ₦25,000,000 and ₦800,000,000 respectively. 

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