When I first met Ade, he was frustrated and confused. He owned three rental properties in Lagos but was barely breaking even. “Dennis,” he began, shaking his head, “I don’t understand. People are always talking about real estate as the ultimate wealth-building tool, but all I see are endless expenses and stress. My tenants complain, my properties are ageing, and it feels like I’m just running in circles.”
I could see the pain in his eyes. He had invested his life savings into these properties, hoping they would secure his future. Instead, he was drowning in repair costs, late rent payments, and the struggle to keep tenants.
His story is not uncommon. Many landlords enter the rental property market believing the income will flow effortlessly. However, without a strategic approach, the dream of financial freedom can quickly turn into a nightmare. How can you maximise the returns on your rental property investments?
Start with the Right Location: Where it All Begins
Let me pose this question to you: would you open a luxury fashion store in a rural market? Most likely, you wouldn’t. The same principle applies to real estate—your property’s location is crucial to its success. Your returns will suffer if you invest in an area with poor infrastructure, limited job opportunities, or low demand.
The right location—such as neighbourhoods with schools, hospitals, and good access to transportation—attracts quality tenants and allows for higher rental prices. However, there’s an important point to consider: even if your property is situated in a good location, it must still stand out. This leads me to my next point.
Maintenance is Non-Negotiable
Ade shared something that truly broke my heart. “One of my tenants moved out last month,” he said. “She told me my property felt like a death trap—leaking roofs, faulty plumbing, and no security. I didn’t think those issues were important as long as the rent was cheap.”
But they are important. A poorly maintained property drives away good tenants. When tenants leave, your income stops while your expenses continue to mount. It’s essential to keep your property in excellent condition to maximise your returns. Regular maintenance may seem like an expense, but in reality, it’s an investment. Would you pay top dollar to live in a rundown house? Neither will your tenants.
Enhance, Don’t Just Maintain
Sometimes, fixing what’s broken isn’t enough; you need to add value. Imagine walking into a rental property with modern kitchen appliances, freshly painted walls, and energy-efficient lighting. It feels premium, right? That’s the kind of property that can command higher rent.
For Ade, I recommended simple yet impactful upgrades: repainting the walls, installing better lighting, and enhancing the front yard. Within months, his tenants were happier, and he was able to increase the rent without any complaints. These improvements don’t have to cost a fortune. Focus on upgrades that matter, such as a secure front door, a clean bathroom, or ensuring a reliable water supply.
Choose Tenants Wisely
The painful reality is that not every tenant is suitable for your property. Ade’s second biggest mistake was accepting tenants without proper screening, as long as they could pay rent. “I just wanted the rent,” he admitted. Unfortunately, some of these tenants turned his property into a nightmare, leading to late payments, constant complaints, and even vandalism. It’s crucial to always screen your tenants. Be sure to check their credit history, employment status, and references. A reliable tenant who respects your property and pays on time is far more valuable than the temporary relief of simply filling a vacancy with just anyone.
Smart Pricing: Don’t Let Greed Cost You
“Dennis, I think my rent is too low,” Ade said one day. He had seen other landlords charging higher rates and wanted to follow suit. But here’s the thing: blindly increasing rent can backfire. If your price is too high for the value you offer, tenants will leave, and you’ll face long vacancy periods. Do your research. Compare your property to similar ones in the area. Find that sweet spot where the rent reflects the value while remaining competitive.
Be Strategic with Rent Adjustments
Now, let’s talk about increasing rent—because let’s face it, inflation doesn’t wait for anyone. Do it thoughtfully. Give your tenants notice and explain why the increase is necessary. For reliable long-term tenants, consider keeping their rent slightly below market rate as a reward. Happy tenants are less likely to leave, saving you from the cost of finding new ones.
Don’t Be Afraid to Seek Professional Help
At one point, Ade admitted he was overwhelmed. Managing three properties while juggling his day job was exhausting. “I feel like I’m constantly putting out fires,” he said. That’s when I suggested hiring a property manager. While it’s an additional expense, professionals bring expertise in tenant screening, maintenance coordination, and market analysis. They can save you time, reduce stress, and even increase your returns by minimising mistakes.
Marketing Matters
One of Ade’s properties stayed vacant for six months. Why? Because he relied on word-of-mouth and a poorly written ad on a single platform. Don’t make that mistake. Invest in high-quality photos, write compelling descriptions, and list your property on multiple platforms. The faster you fill vacancies, the more consistent your income.
Reinvestment and Patience
At the end of our conversation, I shared this insight with Ade that I want to share with you as well: investing in rental property is a marathon, not a sprint. It’s not solely about maximizing every naira from your tenants; it’s about building long-term value. Reinvest your properties to keep them attractive. Remember, every decision you make today will impact your returns in the future.
Ade’s experience didn’t conclude in frustration. Over time, he implemented these strategies, and things improved. His properties are now flourishing, his tenants are satisfied, and his stress has diminished. Your rental property can achieve the same success, but it begins with a shift in mindset. Don’t just be a landlord—be a strategic investor. Take care of your property, choose your tenants wisely, and continuously educate yourself about the market. If you adopt this approach, you won’t just collect rent; you’ll build a legacy.
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