Every landlord eventually asks the same question: rent it for a year or list it by day? The honest answer is that short-lets win on paper (almost always) and long-term rentals win on peace-of-mind (almost always). The real skill is knowing what trade-off fits your property, location and appetite for stress.
The Numbers for Nigeria
The contrast between the two models is stark in Lagos. The Lekki Phase 1 market reports short-let apartments with net yields of around 24%, rising to 26–32% net in prime cases, compared to just around 4–5% gross on a long-let of the same unit. Thus, a serviced two bedroom in Lekki can command far more renting by the day at scaled-up seasonal rates than the same unit would command on a standard monthly lease.
This is exemplified at ground level in a widely cited Victoria Island case study: a two-bedroom short-let, priced at ₦250,000 a night, run at roughly 75% occupancy (about 23 nights a month), and after deducting management, cleaning and admin costs, still nets around ₦3.45 million monthly — versus roughly ₦800,000 a month for the identical unit on a long-term lease. That’s over four times the income, not including the extra work.
More broadly, Nigeria’s longer-term rentals offer yields of 7-15%, with well-managed short-lets doing significantly better and furnished, serviced units can generate 10-15% gross yields, sometimes as high as 20-30% net in the best-run cases. But the market is tightening, with rising competition and operating costs already squeezing margins on Lagos short-lets, forcing serious investors to focus more on location and management quality than on chasing high nightly rates.
The Parallel Global
Nigeria is joining the world. In the United States, short-term rentals usually produce 30–80% more gross income than long-term rentals, with the net advantage being around 20–35% after costs — but this is very market-dependent, as seasonal tourist towns have the biggest gap while ordinary suburban markets see almost none. Some U.S. operators claim Airbnb units generate two to three times the revenue of an identical property as a long-term rental.
Paris tells the same story, but as a warning. Short-lets there can gross two to three times more than long-term furnished rentals, but politicians are actively campaigning to cap or ban them, and long-term furnished leases to expats and corporates already offer low vacancy without the regulatory or “political headline” risk that shadows Airbnb-style investing.
The True Tradeoff
Short-lets cost more. A lot more. Two to five times more often. Almost everyplace. Nigeria included. But that premium comes with higher management demands, furnishing costs, income volatility and, increasingly, regulatory risk that can come without much warning. Cheaper, but less demanding: one tenant, one contract, predictable cash flow. Smart Lagos and global investors are settling on a hybrid model. Run short-lets in peak season and flip to long-term tenants when demand slows. Capture upside without carrying all the risk.