So let’s talk about this tweet.

I stated that I will never build/buy houses for rent again. Why did I say that?In 2013, I moved from my 4 bedroom semi detached house in Ikota, Lekki, Lagos. I renovated it and decided to let it out. 

The going rate for that kind of property in that area was between N1.8m to N2.5m. I can’t remember how much I charged but it was within that range. My tenant was not a troublesome person.

I don’t think I ever met him. The closest interaction I had was when his wife greeted me at the airport. I didn’t know her but she told me she was my tenant. Anyway, they renewed their rent twice meaning they stayed for 3 years before they moved out. I think they went abroad or something. 

Let’s assume I was collecting N2m per annum, that means I must have earned N6m in revenue.

If I remember correctly, they paid N500k as security deposit. After the tenants moved out, I decided to do a renovation of the house. Now, don’t get me wrong. They didn’t destroy the house. Most of the things were in order. Even though they maintained the house okay and things were in order, a house that was lived in for 3 years sure needs a facelift and a few touches on the structure itself.

I have two reasons for this. 1. I am very protective of my properties. I want them to remain into top shape forever. 2. ⁠To look good for future tenants. I went ahead to do the renovations. After cutting as much costs as possible, I spent a total of…Nine Million Naira!I practically ran at a loss. I tried again. Same story.

Then I put my four flats in Badore, Ajah for rent. Same outcome. Then my 3 bedroom at at Sangotedo, Ajah. Same outcome. After about 5 years. I gave up. People live in the Badore house for free now. At least I can chase them out anytime I want if they are not maintaining it well. 

Let me just use it to tie down capital. Not a good business .I have converted the Ikota house to a short let. Renovations and furnishing have been done. We will be starting this December. Let’s see how that one goes. I don’t want you to get me wrong. I love real estate and I won’t stop investing in it. I just won’t be doing long term residential lettings.I am more for shopping malls, hotels, land leasing, parking lots etc. This is my personal experience. Yours might be different.