How Much Does It Cost to Start a Short-Let Business in Lagos?
How much it costs to start a short-let business in Lagos: ₦7,155,895 for one apartment in AMI's worked example, line by line, with the daily break-even.
By Ifeanyichukwu Chris Okorie
Founder & Course Architect, African Masterbuilders Institute
The cost to start a short-let business in Lagos with one rented apartment is ₦7,155,895 in AMI's worked example, and furniture is less than half of that figure. The rest is registration, a 5% reserve and two months of running costs, which keep the apartment open while the first reviews build. After that, the apartment has to sell about ₦43,992 every day to cover its costs.
Key takeaways
- Starting money has four lines, not one: furnishing (₦3,500,000), registration (₦70,000), a reserve (₦827,514) and two months of running costs (₦2,758,381).
- Rent is the cost that decides survival: ₦9,200,000 a year in the plan, owed whether the apartment is booked or not.
- The daily break-even is ₦43,992 of sales against a plan of ₦53,200: sales can fall only 17.3% before they reach break-even, a cushion the plan itself calls thin.
- Never pay a year's rent from starting money, and register before you list.
- A lower-capital route exists (managing an owner-furnished apartment for 25% of bookings), but it earns much less per apartment.
Key numbers
- ₦7,155,895: starting capital for one rented, furnished apartment (plan's Micro start)
- ₦9,200,000: rent a year, the largest fixed cost
- ₦43,992: sales needed every day to break even, about 31% occupancy at ₦140,000 a night
- ₦2,797,715: Year-1 EBITDA after registration, founder unpaid
- 17.3%: how far planned sales can fall before they reach break-even
In this guide
- What the cost to start a short-let business in Lagos really covers
- Work out your own starting money with the free calculator
- Furnishing: what to buy first, and the four rules that protect your money
- Where the year's money goes for one apartment
- Rent is the cost that decides whether you survive
- Your daily break-even: the number to beat every day
- Occupancy, rate and seasons: three levers you control
- Two traps before the first guest
- Two other ways in, and when to grow
- Test your decisions before real money moves
- Your first 30 days, in the order the plan sets
- The part most people get wrong
- Founder's note
- Frequently asked questions
- Sources and how this guide was made
This guide comes from AMI's Lagos Short-Let Business Plan, Nigeria Edition. The plan is built around a worked example, Eko Haven Stays Ltd, an illustrative short-let and property-management company in Lekki Phase 1, Lagos. Every figure below is quoted from the plan's Five-Year Financial Model or from the dated sources listed at the end, not estimated for this article, and every tool you see in the pictures is a tool built from that plan.
Projection, not a promise. Figures are the plan's projections for an illustrative company at ₦1,331 per US$1 (the official rate on 21 September 2026). Verify current rents, prices, fees and taxes before you commit money. Educational, not financial, legal or tax advice.
▶ The full video episode
How Much Does It Cost to Start a Short-Let Business in Lagos?
Watch on YouTubeWhat the cost to start a short-let business in Lagos really covers
Most people price the furniture and stop. That is the most expensive mistake a first-time operator can make, because furniture is only the visible part of the start. A short-let is a business that sells nights. Before it sells a single night, it has to be furnished, registered and able to pay its rent and power through the slow first weeks, when there are no reviews yet and bookings arrive slowly.
The plan's smallest safe start, which it calls the Micro start, is one apartment, rented from its owner, furnished by you and run from your phone, with no staff and no office. Guests find it on Airbnb, Booking.com or through direct bookings. The plan prices that start at 38% occupancy and ₦140,000 a night, the entry end of the Island-axis band of ₦120,000 to ₦200,000 that the plan documents for Lekki, Ikate and Victoria Island.
| Line of starting money | Plan figure | What it pays for |
|---|---|---|
| Furnishing and fit-out | ₦3,500,000 | Everything that makes the apartment guest-ready (a plan figure to replace with two written quotations) |
| Registration | ₦70,000 | About ₦20,000 for a business name and ₦50,000 for LASRERA, the Lagos real-estate regulator (unconfirmed) |
| Reserve against a slow month | ₦827,514 | 5% of the year's costs, the AMI reserve rule at Micro level |
| Two months of running costs | ₦2,758,381 | Rent, power and other fixed costs while the first reviews build |
| Total starting capital | ₦7,155,895 | About US$5,376 at the plan's rate |
Look at the last two lines together. The reserve and the two months of running costs come to ₦3,585,895, which is more than the furniture. That money is not waste. The plan treats those two lines as the most you can afford to lose before you stop, and it says plainly: never commit to a rent that those two lines could not carry for at least three months.
Work out your own starting money with the free calculator
Before going further, it helps to have the numbers in your own hands. We built a free Short-Let Start-Up and Break-Even Calculator from the plan. It comes as an Excel workbook and as a phone app that opens in any browser, works offline and keeps your entries on your phone.
With the plan's own figures it shows ₦7,155,895 of starting money, ₦2,797,715 of Year-1 EBITDA (profit before depreciation, interest and tax), a daily break-even of ₦43,992 and a cushion of 17.3%. The verdict reads AMBER: workable, but thin. Now change one number. Put your occupancy at 30% and the verdict turns RED, because the apartment would then sell less every day than it costs to run.
Furnishing: what to buy first, and the four rules that protect your money
The plan does not price furnishing item by item, so the first job is to price it yourself, in the order that protects your bookings. The Micro Start Kit sets that order.
- Backup power: an inverter and battery bank sized for lights, fans, internet and the cooling units you will run. Power cuts lose bookings, and operators interviewed by Nairametrics (5 August 2026) named electricity among their largest operating costs.
- Cooling: a split-unit air conditioner for each bedroom and the living area, with installation and warranty in writing.
- Sleeping: beds, good mattresses and two sets of linen, so one set can be washed while the other is in use.
- Access and security: a smart lock with remote code management and a spare battery plan.
- Kitchen and living: basic furniture, a fully equipped kitchen and appliances, with an itemised invoice.
- Internet: a dedicated connection with a backup option, speed-tested at the apartment before you list it.
- Finishing touches: curtains, lighting, a workspace and small details, bought last, after the first bookings show what guests ask for.
Four rules sit beside that order. Get two written quotations for every large item. Pay against an invoice in the business's name, never the founder's personal name. Count and photograph everything on delivery, because those photographs become the inventory that settles any dispute with a guest or the owner. And do not buy anything before the written agreement with the apartment's owner is signed.
Where the year's money goes for one apartment
Is a short-let in Lagos profitable? In the plan's Micro model, yes, but less than most people expect, and for one clear reason. Follow the year's money for one apartment booked at 38% occupancy and ₦140,000 a night.
| Year-1 line, one apartment | Plan figure |
|---|---|
| Gross bookings (38% × 365 nights × ₦140,000) | ₦19,418,000 |
| Rent paid to the apartment's owner | ₦9,200,000 |
| Electricity and backup power | ₦2,160,000 |
| Platform commission (12%) | ₦2,330,160 |
| Marketing, software, insurance and compliance | ₦2,340,000 |
| Cleaning and turnover | ₦520,125 |
| All Year-1 costs | ₦16,550,285 |
| One-off registration | ₦70,000 |
| EBITDA after registration | ₦2,797,715 |
EBITDA is profit before interest, tax and depreciation, so it is not yet money in your pocket. It is also the whole of the operator's reward for a full year of work, because the founder takes no salary in this model. That is an honest picture: a working income from one apartment, not easy money. The reason is rent. It takes nearly half of everything guests pay.
Rent is the cost that decides whether you survive
Rent is a fixed cost. It stays the same whether the apartment is full or empty. In the Micro model, fixed costs (rent, power, marketing, software, insurance and compliance) total ₦13,700,000 a year, which is ₦37,534 for every day of the year, including the empty ones.
The variable costs, the platform commission and cleaning, take only about 14.7% of each booking. That creates a very particular kind of business. Each extra booked night is mostly profit, and each empty night is mostly loss. Nairametrics (5 August 2026) put the same idea in practical terms: operators on one-year leases must first recover the year's rent before they earn anything.
This is also why the plan's Micro case uses 38% occupancy instead of the 42% it uses for a staffed business with several apartments. A solo operator opening a new listing with no reviews is likely to start lower. Lagos citywide occupancy runs from about 31% to 45%, and the plan's own seasonality runs from 1.60 times a normal month in December to 0.80 in the mid-year months, so cash arrives unevenly.
Your daily break-even: the number to beat every day
The single most useful number for a short-let operator is the daily break-even: the sales you must make every day to cover every cost. In the plan's Micro case it is ₦43,992. It comes from dividing the cost of a day (₦37,534) by what is left of each naira after the platform and cleaning take their share.
| Daily number, Micro case | Plan figure |
|---|---|
| Fixed costs per day | ₦37,534 |
| Sales needed per day to break even | ₦43,992 |
| Planned average sales per day | ₦53,200 |
| Daily profit target (Year-1 EBITDA before registration, ₦2,867,715 ÷ 365) | ₦7,857 |
| Cushion: how far sales can fall before break-even | 17.3% |
Here is the same calculation as a worked example, so you can repeat it with your own rent and rate.
The plan calls that 17.3% cushion thin, because one weak month uses it up. At ₦140,000 a night, ₦43,992 a day works out to about 31% occupancy, the very bottom of the citywide range. In plain terms: this business works, but only for an operator who watches the number every day. Write it at the top of your daily record, and compare every week's average against it.
Occupancy, rate and seasons: three levers you control
Three levers move a short-let's results more than anything else.
- Occupancy. Price and presentation drive it. Professional photographs, fast replies and a clean, cool, powered apartment win the first reviews; the reviews then lift every month after.
- Rate. The plan prices the first five to ten bookings at the lower end of the band to earn reviews quickly, then moves to the plan rate. A permanent discount is a different matter: it raises the occupancy you need to break even.
- Seasons. December is the month that pays for the quiet months. Operators reported a tougher 2025 Detty December and a sharp drop in bookings after the first week of January 2026 (Nigeria Housing Market, 1 September 2026, citing Nairametrics). That swing is exactly why the reserve exists, and why December should be priced by rule, decided in advance, not by mood.
Two traps before the first guest
Trap one: a year's rent in advance. Many Lagos owners ask for a year upfront. In the plan's model that is ₦9,200,000, which is more than the whole starting capital of ₦7,155,895. The plan's instruction is direct: agree monthly payment in writing before anything else, and if the owner insists on advance payment, stop and re-work the budget. Reports describe limits on advance rent in the Lagos Tenancy Law 2011; whether they apply to your arrangement is a question for a lawyer.
Trap two: listing before you register. The plan registers before the first guest:
- a business name (or a company) with the Corporate Affairs Commission;
- a business bank account, so guest money never mixes with personal money;
- a written question to LASRERA asking whether its registration applies to you;
- registration for the Lagos 5% consumption tax, which is collected from guests and paid to the state every month. On a ₦140,000 night that is ₦7,000.
Two other ways in, and when to grow
With less money. You can manage an apartment that its owner has already furnished, for 25% of its bookings, subject to LASRERA's written answer on whether its fee cap applies (Episode 2 explains). There is no furnishing and no rent, so almost none of your own money is at risk. But it earns much less per apartment: in the plan's unit economics, a managed apartment contributes ₦2,215,185 a year before shared costs, against ₦6,951,685 for a rented and furnished one at 42% occupancy. The plan has no Micro budget for this route, so re-work the numbers before you rely on it. Episode 2 of this series covers that route in full.
With more money. The plan's SME start runs six apartments with an operations coordinator and needs ₦23,628,075, financed with a ₦19,000,000 intervention-fund facility at 9% and ₦5,000,000 of founder equity. The Large-Scale start needs ₦99,209,399. Each step up is a different business, not a bigger copy of the first apartment.
When to grow. The plan's rule is to move up only when you hold 12 months of retained profit and a record of signed owner contracts. Growth waits for proof.
Test your decisions before real money moves
Knowing the numbers is one thing; choosing well when the owner, the tax office and a slow month all arrive is another. The One-Apartment Start Challenge lets you run a first year, decision by decision: how you start, registration, your first prices, records, power, a slow month, the owner's request for a year upfront, your reserve, December and a second apartment.
Your first 30 days, in the order the plan sets
- Agree the written agreement with the owner before you buy anything, and have a lawyer review it. Never rely on a verbal arrangement.
- Register: business name, business bank account, a written question to LASRERA and the 5% consumption tax.
- Get two written quotations for every large item, and pay against invoices in the business's name.
- List on every channel at one price, at the lower end for the first five to ten bookings.
- Start the daily record on your phone: bookings, money in, money out and a photograph of every receipt.
The plan puts the first booking six to eight weeks after the decision to start. Plan your cash for the same.
The part most people get wrong
The common mistake is budgeting for the apartment and forgetting the months. An operator prices the furniture, signs the rent and opens with nothing left. The first weeks have no reviews, bookings come slowly, and rent and power are paid from savings until the savings are gone. The fix is simple and unglamorous: hold the reserve and two months of running costs, ₦3,585,895 together in the plan, before you sign anything, and decide your stop line while you are calm.
Founder's note
When we built this plan at AMI, the line that changed the conversation most was not the furniture or even the rent. It was the reserve and the two months of running costs. Almost everyone who asks about short-lets has priced an apartment; very few have priced the months before the reviews arrive. My advice is simple: put your own rent and occupancy into the free calculator before you speak to any owner, and walk away from any deal that needs a year's rent from your starting money.
— Ifeanyichukwu Chris Okorie, Founder & Course Architect
Frequently asked questions
How much money do I need to start a short-let in Lagos?
In AMI's worked example, one rented and furnished apartment needs ₦7,155,895: ₦3,500,000 for furnishing, ₦70,000 for registration, an ₦827,514 reserve and ₦2,758,381 for two months of running costs. Replace each plan figure with your own written quotes and rent.
Is a short-let business profitable in Lagos?
In the plan's Micro model, one apartment at 38% occupancy and ₦140,000 a night books ₦19,418,000 a year and leaves ₦2,797,715 of EBITDA after registration, before tax and with the founder unpaid. It is profitable, but rent takes nearly half of the bookings, so the margin for error is small.
How many nights must a Lagos short-let be booked to break even?
The plan's daily break-even is ₦43,992 of sales. At ₦140,000 a night that is about 31% occupancy, roughly 115 booked nights a year.
Can I start a short-let without furnishing an apartment?
Yes. You can manage an owner-furnished apartment for a commission (25% of bookings in the plan, subject to LASRERA's answer on its fee cap). It needs much less money and earns much less per apartment, and the plan has no Micro budget for it, so re-work the numbers before you rely on it.
Should I pay a year's rent in advance for a short-let apartment?
Not from your starting money. In the plan's model a year's rent (₦9,200,000) is more than the whole Micro starting capital, so the plan says to agree monthly rent in writing, or stop and re-work the budget. Ask a lawyer whether Lagos advance-rent limits apply to your arrangement.
Do I need to register a short-let business in Lagos?
The plan registers before the first guest: a business name or company, a business bank account, a written question to LASRERA, and the Lagos 5% consumption tax. Verify current rules and fees with each authority before you rely on them.
What should I buy first when furnishing a short-let?
Backup power, then cooling, then good beds and linen, then a smart lock. The kitchen, internet and finishing touches follow, with décor last, once guests tell you what they want.
Sources and how this guide was made
This guide was written by the author from AMI's Lagos Short-Let Business Plan, Nigeria Edition (worked example: Eko Haven Stays Ltd, an illustrative company). The plan figures come from its Five-Year Financial Model, Micro Starter Snapshot, Micro Start Kit and Unit Profit & Daily Break-Even Card. The images are screenshots of the tools AMI built from the plan for this episode. Market context comes from the dated sources below; verify current figures before you rely on them.
- Nairametrics, "Lagos short-let profits under pressure as competition intensifies", 5 August 2026: https://nairametrics.com/2026/08/05/lagos-short-let-profits-under-pressure-as-competition-intensifies/
- Nigeria Housing Market, "Lagos Shortlet Boom Intensifies Competition as Rising Supply Pressures Operators", September 2026: https://www.nigeriahousingmarket.com/news/lagos-shortlet-boom-rising-supply-pressures-operators
- BusinessDay, "Lagos shortlet market growth slows to N285.5bn amid ban, tax changes", 19 March 2026: https://businessday.ng/companies/article/lagos-shortlet-market-growth-slows-to-n285-5bn-amid-ban-tax-changes/
- Ownkey, "How to manage a short-let / Airbnb in Nigeria", 5 July 2026: https://ownkey.com/ng/blog/how-to-manage-short-let-airbnb-nigeria
Educational, not financial, legal or tax advice. Figures come from an illustrative worked example in the AMI plan, or from the dated sources listed above; they are projections, not promises. Rules, prices and rates change: verify them with the current official source before you decide.
© 2026 African Masterbuilders Institute · Privacy · Disclaimer · Last reviewed 18 October 2026