How Self-management Deprives Landlords of Rental Yields Says Expert

Mary Nnah

Experts have warn that informal tenancy management, prolonged vacancies, and legal bottlenecks are cutting investment returns to below 5 per cent in major urban centers.

Nigeria’s real estate sector is facing severe yield erosion, with landlords incurring millions of naira in lost revenue annually due to informal self-management practices rather than broader macroeconomic pressures.

While strategic commercial and residential investors in Lagos and the Federal Capital Territory (FCT), Abuja, record rental returns exceeding 12 per cent, self-managing property owners remain constrained to yields between 3 and 5 per cent.

Speaking on the operational deficits within the domestic rental market, estate surveyor and valuer Suleman Dimeji Bamgbose observed that professional property management has evolved from an administrative convenience into a critical financial necessity for asset preservation.

“In Nigeria today, your property is not truly an asset until it is professionally managed,” Bamgbose said. “Self-managed landlords typically collect between 60 and 85 per cent of their expected rent owing to structural legal gaps and inadequate tenant screening. A structured management framework elevates collection efficiency above 95 per cent, transforming real estate assets into productive passive income streams.”

According to ESV Suleman Bamgbose, investment efficiency in major urban centers relies heavily on proactive management strategies that mitigate local systemic risks, including high default rates, infrastructure deficits, and statutory eviction delays.

He noted that while residential properties yield an average of 4 to 10 per cent and commercial hubs generate up to 12 per cent or more, self-managed units routinely suffer from extended vacancy periods lasting three to six months. In contrast, active professional marketing reduces unit turnaround to between one and two months.