Shortlet Properties: Profitable Investment or a Regulatory Time Bomb?

ESV Anih, Mary Chiamaka

In recent years, shortlet apartments have taken Nigeria’s real estate market by storm. From Lagos to Abuja and Port Harcourt, the demand for furnished short-term rentals often listed on platforms like Airbnb has grown exponentially. These properties have become a lucrative business for investors, offering high returns compared to traditional long-term rentals. Yet, beneath this boom lies a growing debate: are shortlet properties a sustainable investment opportunity or a regulatory time bomb waiting to explode?

For many property owners, shortlets have redefined real estate profitability. With the influx of tourists, business travelers, and digital nomads, short-term rentals offer flexibility and quick returns. In cities like Lagos, where a one-bedroom apartment might fetch ₦1.2 million annually under a traditional lease, the same unit can generate twice that amount through shortlet bookings. The allure is simple — higher yields, faster turnover, and greater control over property use.

However, this gold rush is not without consequences. The rapid rise of shortlets has triggered concerns about regulatory oversight, safety, and housing affordability. In some high-demand areas, residential buildings have been converted into short-term rentals, reducing available housing stock and driving up rent prices for residents. Tenants and landlords frequently clash over noise, security, and misuse of shared facilities, while estate associations struggle to enforce existing rules.

The bigger challenge, however, lies in the absence of clear regulation. Unlike in developed markets where short-term rentals are taxed, registered, and monitored, Nigeria’s shortlet sector largely operates in a grey zone. Many operators neither pay hospitality taxes nor comply with safety and zoning laws. This lack of structure exposes the sector to potential government crackdowns and investor losses if sudden regulations are introduced.

Recent incidents have further amplified the need for oversight. There have been reports of security breaches, property vandalism, and criminal activities linked to shortlet apartments. Without standardized background checks or property management protocols, both hosts and guests face risks that could easily spiral out of control.

To prevent this from becoming a regulatory crisis, Nigeria must act proactively. State governments, particularly in Lagos and Abuja, should introduce policies that balance profitability with accountability. Registration and licensing of shortlet operators, safety inspections, and taxation frameworks should be implemented to formalize the sector.

Equally important is the role of technology in creating transparency. A centralized digital registry could help track operators, ensure compliance, and protect consumers. For investors, collaboration with professional property managers can help maintain standards, manage risks, and protect their investments in the long term.

Shortlet properties have undoubtedly opened new frontiers for real estate investors, creating jobs and stimulating local economies. Yet, without clear regulations, this thriving market could easily tip into chaos. Nigeria stands at a crossroads: either harness the benefits of the shortlet boom through smart policies or allow it to spiral into a costly regulatory disaster. The choice is clear sustainable profit requires structured governance.

Chiamaka, is the Principal Partner of Amaka Anih & Associates, a firm of Estate Surveyors and valuers. She wrote from Port-Harcourt, Rivers State.