Running a Shortlet in Nigeria: What the Numbers Actually Look Like

The pitch is seductive and it is everywhere: a two-bedroom in Lekki that lets for ₦6 million a year can charge ₦60,000 a night. Three hundred and sixty-five nights is ₦21.9 million. Why would anyone still be taking annual rent?

Because nobody lets three hundred and sixty-five nights. Here is how to model a Nigerian shortlet so the answer you get is the one you will actually live with.

Start with the maths that matters

The only number that decides this business is occupancy, and it is the number every optimistic spreadsheet gets wrong. Take that same ₦60,000 nightly rate:

At 30% occupancy, the shortlet is roughly level with the annual rent — before a single cost, and before counting your own time. That is the real comparison. Everything above 30% is the business; everything below it is a more expensive way to earn the same money.

The costs nobody puts in the spreadsheet

Gross revenue is not income. Deduct all of this:

• Cleaning and laundry, per stay. Not per month — per stay. A shortlet with lots of one and two-night bookings turns over constantly, and each turn costs money and coordination.
• Utilities. You are paying for electricity, diesel, water and internet, not the guest. Guests who are not paying the bill do not run the air conditioning economically.
• Consumables and restocking. Toiletries, water, cooking gas, tea and coffee, cleaning supplies. Small individually, relentless in aggregate.
• Furnishing depreciation. A unit turned over a hundred times a year ages far faster than one lived in by a single family. Budget for replacing soft furnishings, linen and appliances on a real cycle.
• Management. Either you pay a manager, or you are the manager — answering enquiries, meeting guests at odd hours, handling a failed pump on a Sunday. This is a job. Price it even if you do it yourself.
• Platform and payment fees, and any commission on bookings.
• Vacancy and seasonality. The quiet weeks are not evenly spread; they arrive in blocks.

Run those against the 45% row above and the gap to annual rent narrows considerably. That is not an argument against shortlets — it is the argument for knowing which unit, in which area, at which rate.

Power is the whole business

In Nigeria, this is the difference between a shortlet that earns reviews and one that earns refunds. A guest paying ₦60,000 a night expects the lights to stay on, full stop — and they will say so publicly if they do not.

Practically, that means:

• A dependable backup arrangement — inverter, solar, or a generator with fuel that is your responsibility, not the guest’s errand.
• Diesel or fuel costed into the nightly rate, not treated as a surprise.
• Honesty in the listing about what the arrangement is. Guests forgive limits they were told about; they do not forgive discovering them at 11pm.
• Water storage and a working pump. It ranks immediately behind power in every complaint pattern.

Pricing: rate, minimum nights, discounts

Four levers, and most hosts only use the first.

1. The nightly rate. Set it against comparable units in the same area, then let the market correct you. If you are fully booked three weeks out, you are underpriced.
2. Minimum nights. The single most underrated control. A two-night minimum can raise net income at lower occupancy by cutting the number of turnovers — fewer cleans, fewer check-ins, less wear.
3. Weekly and monthly discounts. A guest staying fourteen nights is worth a real discount: no turnover cost, no gap, predictable revenue. Consultants, relocating families and medical visitors are a steadier market than weekend leisure in most Nigerian cities.
4. Extra-guest fees and the guest cap. Price capacity honestly and state the cap clearly, so a four-person booking does not arrive as seven.

Peacoqs supports each of these directly on a shortlet listing — nightly and weekly rates, minimum and maximum nights, cleaning fee, security deposit, extra-guest rules and weekly or monthly discounts — so the price a guest is quoted is the price your model assumed.

House rules, deposits and cancellations

A shortlet is not a tenancy, but it still needs terms agreed before arrival rather than argued at the door:

• Check-in and check-out times, stated and enforced, because your cleaning window depends on them.
• A guest cap, and whether visitors are permitted.
• Parties. Decide, state it, and mean it. The “small get-together” that becomes an event is the most expensive thing that happens to Nigerian shortlets.
• Smoking and pets.
• Quiet hours, particularly in a residential estate where your neighbours did not sign up for a rotating cast of guests.
• A security deposit or damage policy, with the conditions written down.
• A cancellation policy you have actually chosen. A flexible policy wins bookings; a stricter one protects revenue on high-demand dates. Pick deliberately rather than by default.

What makes a shortlet listing convert

• Photographs that match reality. Wide, bright, honest. A flattering photo that oversells the room buys you one booking and one bad review.
• Power and water stated plainly — the first thing Nigerian guests look for, and most listings bury it.
• The real location, and what is walkable from it.
• The total price, cleaning fee included. Fees revealed at checkout are the most common cause of abandoned bookings.
• Fast replies. Shortlet demand is impatient; the host who answers in ten minutes takes the booking from the host who answers tomorrow.

When the annual tenant wins

Be honest about which business you are in. Annual letting wins when:

• The property is not in an area with real short-stay demand — business travel, events, medical visits, tourism.
• You cannot commit to reliable power and water.
• You have no manager and no appetite to be one.
• The estate, or your own tenancy, restricts short-letting. Check before you furnish anything.
• You need predictable income rather than variable income with a higher ceiling.

And the shortlet wins when the location has genuine demand, you can operate it properly, and you want the upside that comes with the work. Both are legitimate. What is not legitimate is the ₦21.9 million on the first line of this article.

If you are weighing it up, look at what shortlets in your area charge and at their minimum-night rules, then list your property and price it against what is actually booking.