Nigeria’s real estate is witnessing a quiet revolution. Vacation rentals, once an afterthought, are now gaining center stage in major cities like Lagos and Abuja. Fueled by digital bookings, rising domestic tourism, and a growing middle class, the industry is emerging as a powerful income-generating asset.

Tourists, business travelers, and even locals now prefer the privacy and flexibility of short-stay apartments over traditional hotels. This shift in accommodation preference is driving demand for high-quality, short-let properties across urban and resort locations.

In Lagos alone, short-let rentals generated over ₦264 billion in 2024, with projections suggesting a rise to ₦300 billion by 2025. These numbers reflect not just market growth but investor interest and profitability.

Beyond Lagos, areas like Abuja, Ikeja, and even coastal towns are seeing a wave of vacation home developments. Platforms like Airbnb, Hotels.ng, and Booking.com are making it easier for property owners to monetize their spaces.

For investors looking to tap into a high-yield, fast-growing market with strong rental income potential, Nigeria’s vacation rental sector offers a unique entry point. This article explores the full opportunity—from key cities to financial metrics—serving as a roadmap for both local and foreign investors.

Upon reading this article, you will be able to,

Understand how Nigeria’s vacation rental market is evolving and why cities like Lagos and Abuja are leading the short-let boom.

Discover high-potential investment hotspots such as Lekki, Ikoyi, and emerging destinations like Calabar and Obudu.

Learn about key financial metrics, including average daily rates, occupancy levels, and how vacation rentals outperform traditional leases.

Explore the operational essentials—legal compliance, property management, and digital marketing—that ensure long-term success.

Identify common risks like seasonality, infrastructure gaps, and regulatory challenges, along with smart ways to manage them.

Get equipped with practical steps to launch your own vacation rental investment in Nigeria, from research to scaling your portfolio.

A Fast-Evolving Industry

Nigeria’s vacation rental industry is undergoing a transformation. What was once an informal, unstructured sector has become one of the most promising segments in real estate. Cities like Lagos, Abuja, and Port Harcourt are witnessing increased investment in short-let apartments and furnished units.

The rise of this industry is tied to shifting lifestyles, digital connectivity, and growing travel patterns among both locals and foreigners.

Strong Demand Drivers

Several factors are fueling this growth. First, domestic tourism is increasing, especially among Nigeria’s emerging middle class. People now travel more for holidays, family visits, and cultural events. Diaspora Nigerians returning for visits often book vacation rentals for longer, private stays.

Second, business travel remains a consistent source of demand. Lagos and Abuja, being business hubs, attract both Nigerian and foreign professionals who prefer furnished apartments over costly hotels.

Lastly, Nigeria’s booming creative sector—film, music, fashion—frequently brings artists and crews to different cities. These travelers prefer short-stay homes that offer more freedom and affordability.

Changing Guest Preferences

The demand isn’t just about space; it’s about experience. Guests now expect stylish, comfortable homes equipped with Wi-Fi, air conditioning, kitchenware, and smart TVs. Vacation rentals offer these amenities in a homely setting, which hotels often lack.

For many, the ability to cook, host friends, and enjoy local neighborhoods makes vacation rentals more attractive than traditional accommodation.

The Power of Online Platforms

Digital booking platforms have transformed the industry. Airbnb and Booking.com now list thousands of Nigerian properties, especially in Lagos, Abuja, and tourist destinations. Local platforms like Hotels.ng also help renters discover options with trusted reviews and secure payment systems.

These platforms make it easier for investors to reach a wide audience, increasing occupancy and revenue potential.

Revenue Trends and Growth Forecasts

Revenue trends show the industry’s strength. According to AirROI, the average daily rate (ADR) in top areas like Ikoyi and Victoria Island ranges between $70 and $150 per night. Some luxury listings fetch over $200 per night, especially during peak seasons.

In 2024, short-let rentals in Lagos alone generated around ₦264 billion. That figure is expected to reach ₦300 billion by 2025, signaling consistent year-over-year growth.

Short-Let vs. Long-Term Leasing

Investors are increasingly favoring vacation rentals over long-term leases. Short-lets offer higher gross returns, quicker cash flow, and flexibility in pricing. While long-term tenants bring stability, vacation rentals provide room to scale revenue based on market trends and seasonal pricing.

Lagos: The Heart of Short-Let Growth

Lagos is Nigeria’s largest and most active vacation rental market. Areas like Victoria Island, Lekki, Ikoyi, and Banana Island dominate the landscape. These neighborhoods are known for their luxury apartments, high security, and proximity to nightlife, beaches, and business districts.

In 2024, Lekki alone accounted for ₦94 billion in short-let income. Ikoyi generated ₦37.5 billion, while Victoria Island brought in ₦19.3 billion. These figures reflect both high demand and premium pricing in these zones.

The average nightly rate in these areas ranges from $80 to $150. High-end units can charge even more, especially during festive seasons, weddings, or conferences.

Abuja: The Capital of Business Travel

Abuja is emerging as a strong vacation rental market, especially for business travelers and diplomats. The central business district, Wuse, Garki, and Asokoro are top-performing zones. Guests often include government officials, consultants, and international NGO staff.

Short-let homes in Abuja offer a calm, secure alternative to hotels. Average daily rates range from $60 to $120, with high occupancy during the workweek and event periods.

As the capital expands and hosts more international events, demand for quality rentals continues to grow.

Ikeja: Lagos Mainland’s Hotspot

Ikeja, home to the Murtala Muhammed International Airport, is another high-potential zone. Its proximity to the airport, major malls, and government buildings makes it ideal for both short-stay tourists and business travelers.

With more affordable property prices compared to the island, Ikeja presents an attractive option for mid-range investors looking for strong returns.

Coastal & Nature-Based Destinations

Beyond cities, destinations like Calabar, Obudu, Ilashe, and Badagry are gaining interest. These areas are rich in natural beauty and cultural heritage, making them ideal for eco-lodges, beach homes, and boutique vacation rentals.

Although still developing, these markets offer first-mover advantages. Investors can buy land or build properties at lower costs, with the potential to scale as tourism infrastructure improves.

Average Daily Rates (ADR) and Occupancy

Short-let properties in Nigeria, especially in cities like Lagos and Abuja, enjoy strong revenue performance. The Average Daily Rate (ADR) in Lagos ranges from $66 to $150, depending on the neighborhood and the property’s quality. High-end homes in Ikoyi and Banana Island can command over $200 per night during peak periods.

Occupancy rates vary by location and season. In top-performing areas, investors report occupancy levels of 60% to 75% annually. That means well-marketed properties are rented out 18 to 22 days per month.

Monthly Earnings Breakdown

A two-bedroom short-let apartment in Lekki or Victoria Island can earn ₦800,000 to ₦1.2 million monthly in gross income. If occupancy remains consistent and management is efficient, annual revenue can surpass ₦10 million per property.

For luxury units, annual income can be significantly higher. However, these also come with higher furnishing, utility, and maintenance costs.

Cost Considerations

Short-let operations involve additional expenses not found in traditional rentals. These include:

• Cleaning and laundry services
• Utility bills (light, water, internet, generator fuel)
• Property management or caretaker fees
• Repairs and replacements for wear and tear

Operating costs typically take up 30% to 50% of gross income. Even after expenses, many investors enjoy net rental yields between 10% and 20%, far above the returns from long-term leases.

Comparison With Long-Term Rentals

Traditional rentals usually offer yields of 5% to 8% in urban areas. While they provide income stability, they lack the dynamic pricing and growth potential of short-lets.

Short-let properties, when managed well, deliver faster ROI and better cash flow. They also allow property owners to retain flexibility, choosing when to rent and when to occupy the unit themselves.

Capital Appreciation in Key Locations

Vacation rentals are not just about rental income. Properties in high-demand areas like Ikoyi, Lekki, and Victoria Island are also appreciating in value. Investors have seen annual capital gains of 10% to 15% in these neighborhoods due to increasing demand and limited supply.

Buying early in developing districts also presents strong upside. As infrastructure improves, property values tend to rise significantly over time.

Higher Income Through Dynamic Pricing

Unlike long-term leases, vacation rentals allow you to adjust prices based on demand. During holidays, conferences, or special events, nightly rates can double. This pricing flexibility means you can maximize income during peak periods, boosting overall yearly returns.

Platforms like Airbnb also allow the use of pricing tools that automatically adjust rates to match market demand.

Diversification Benefits

For investors with existing assets, short-let properties add a new income stream. Vacation rentals respond to different economic factors than stocks or commercial property, helping balance risk across a portfolio.

You can also combine vacation rentals with long-term rentals. For example, a property can serve as a short-let during holidays and return to a regular tenant afterward.

First-Mover Advantage in New Markets

Urban areas are becoming more competitive. But tourism towns like Ilashe, Obudu, and Calabar are still emerging. Early investors can purchase land or build vacation homes at a lower cost, targeting niche travelers looking for privacy and natural beauty.

As Nigeria’s tourism sector grows, these locations will likely see rising demand, offering strong potential for long-term profit.

Licensing and Legal Compliance

Before launching a vacation rental in Nigeria, investors must understand local regulations. In Lagos, for example, property owners may need to register with the state government, especially if the unit is in a residential zone. Zoning laws, noise restrictions, and tax compliance are becoming more strictly enforced.

Additionally, the Lagos State Internal Revenue Service (LIRS) may require Value Added Tax (VAT) or Personal Income Tax filings from short-let operators. It’s advisable to consult a legal professional to ensure all permits and taxes are up to date.

Property Management and Staffing

Unlike traditional rentals, vacation homes require active management. Each guest expects a clean, functional, and welcoming space. This includes:

• Daily or weekly cleaning
• Laundry and linen changes
• Guest check-in/check-out services
• On-call maintenance

You can either hire a dedicated caretaker or partner with a property management firm. The latter often takes 15% to 25% of your monthly revenue but handles all operations.

Utilities and Maintenance

Power supply in Nigeria is unstable, especially outside city centers. To ensure a positive guest experience, most short-lets need a generator, inverter system, or solar backup. These add to upfront costs but reduce complaints and cancellations.

High-speed internet, reliable water supply, air conditioning, and working appliances are non-negotiable. Investors must also budget for regular repairs due to higher property usage.

Online Presence and Marketing

Visibility is key to success. Listing the property on Airbnb, Booking.com, and Hotels.ng is essential. Professional photos, good descriptions, and competitive pricing boost bookings.

Social media platforms like Instagram and Facebook can also drive direct reservations. Many successful hosts now build personal brands to attract repeat guests.

Positive reviews and fast communication play a big role in earning “Superhost” or high-ranking status on platforms, which in turn brings in more business.

Infrastructure and Power Supply Issues

One of the biggest challenges in Nigeria’s vacation rental market is unreliable infrastructure. Power outages are frequent, especially outside central areas. To maintain guest satisfaction, property owners often need to invest in generators or solar power systems—both of which increase operational costs.

Water supply can also be inconsistent, requiring additional backup solutions such as boreholes or storage tanks.

Seasonality and Vacancy Risks

Unlike long-term rentals, short-term income can fluctuate. Peak seasons—such as December holidays, weddings, or major conferences—bring in high profits. However, off-peak periods may see low occupancy, especially in secondary markets.

Investors must plan for these seasonal dips and factor them into annual earnings projections.

Security and Guest Screening

Security is a concern in some neighborhoods. Properties must have secure gates, CCTV systems, and reliable on-site staff. Additionally, without proper screening, hosts risk renting to guests who may damage the property or disturb neighbors.

Many platforms offer basic ID checks, but owners should still take extra steps like requiring deposits or vetting bookings manually.

Regulatory Uncertainty

Some Nigerian states, especially Lagos, are starting to regulate short-term rentals more closely. Future rules may include licensing fees, caps on rental days, or limits in residential buildings. Sudden changes in policy can affect profit margins or limit operations.

Staying informed and working with local agents or lawyers can help investors avoid legal troubles and stay ahead of new regulations.

1. Conduct Local Market Research

Start by understanding the local dynamics of your target city. Research neighborhoods, guest demographics, competition, and average daily rates. Tools like AirROI, Booking.com, or even Facebook Marketplace can offer real-time insights on pricing and occupancy trends.

Speak to local agents and visit properties in person if possible. This helps you assess infrastructure, safety, and neighborhood desirability.

2. Choose the Right Location

Not every area is profitable. In Lagos, for example, Lekki Phase 1 and Victoria Island attract high-paying guests. In Abuja, Wuse and Asokoro are top picks. For new markets like Calabar or Obudu, choose locations near tourist sites or event venues.

The right location can significantly impact both occupancy and nightly rates.

3. Select and Furnish the Property

Look for properties that offer privacy, good ventilation, parking space, and backup power. Once purchased or leased, furnish the space with quality beds, modern furniture, kitchenware, internet, and air conditioning.

Stylish, photo-friendly interiors get more bookings online. Don’t forget essentials like water heaters, towels, and toiletries.

4. List on Multiple Platforms

To reach more guests, list your rental on Airbnb, Booking.com, and local sites like Hotels.ng. Optimize your listings with professional photos, engaging descriptions, and guest-friendly policies.

Use dynamic pricing tools to adjust rates based on demand and competitor pricing.

5. Set Up a Reliable Team

You’ll need a cleaner, handyman, and someone to handle guest check-ins. If you’re an absentee owner, consider hiring a property management company to oversee daily operations.

Many investors report higher returns when working with trusted local partners who understand the market.

6. Monitor and Scale

After 3–6 months, review performance. Analyze your booking trends, earnings, reviews, and maintenance costs. If the numbers look good, reinvest into a second unit—or improve your current one.

Lagos: Nigeria’s Short-Let Powerhouse

Lagos has become a national leader in the vacation rental space. In 2024, short-let properties across the city generated over ₦264 billion in income. By 2025, projections suggest the market could cross ₦300 billion, showing strong year-on-year growth.

Top-earning areas include Lekki with ₦94 billion, Ikoyi with ₦37.5 billion, and Victoria Island with ₦19.3 billion. These numbers highlight how high-quality locations consistently attract short-stay guests.

Investors in these zones report occupancy rates of 70% or more during peak seasons and average daily rates ranging from $80 to $150, depending on the property’s standard.

A Case from Victoria Island

One investor purchased a 2-bedroom apartment in Victoria Island for around ₦90 million. After furnishing and listing it on Airbnb, the unit began earning between ₦700,000 and ₦1 million monthly. During festive seasons, the property earns even more due to increased demand from diaspora visitors and event guests.

Despite expenses on utilities, maintenance, and staffing, the owner reported a net yield of about 12% annually, outperforming many traditional rentals in the area.

Abuja and Beyond

In Abuja, similar stories are unfolding. Areas like Wuse, Garki, and Asokoro are seeing a rise in both local and international guests. Investors targeting business travelers have achieved consistent monthly revenue, especially when they offer high-speed internet and power backup.

Smaller markets like Ikeja are also showing promise, particularly due to their airport access and affordability. Vacation homes here tend to have lower entry costs but still offer strong returns.

Nigeria’s vacation rental market is no longer a niche. It’s a fast-growing, high-yield sector that combines real estate with tourism, technology, and lifestyle trends. With increasing traveler demand, rising urban population, and better digital access, the short-let business is thriving, especially in Lagos, Abuja, and select coastal towns.

For investors, the opportunity is clear. Vacation rentals offer higher returns than traditional leases, flexible pricing, and quicker paths to profitability. However, success requires careful planning—location research, legal compliance, good property management, and strong digital marketing.

Start small if needed. Many investors begin with one well-furnished apartment and scale up over time. Focus on delivering quality guest experiences to earn strong reviews and repeat bookings.

Also, stay updated on local laws and market trends. Work with local agents, tax consultants, and property managers who understand the ground reality.

With the right strategy, Nigeria’s booming vacation rental sector can deliver long-term income, portfolio diversification, and strong capital appreciation—all in one investment.