Looking to start a rental business that makes money without recurring costs of production?
Or a business that you only have to invest in capital expenses at the beginning and then start getting consistent cash flow with minimal maintenance costs?
Then you are not alone.
Due to the economic situation in Nigeria, more and more Nigerians are now looking to monetize their properties to earn side income on a consistent basis.
Many working class people are now turning their vehicles into taxis, and many house owners are now increasingly open to listing their houses for Airbnb rentals.
Safe to say, there’s money in the rental business, and you wouldn’t be wrong to invest in one as a Nigerian.
Here are a few rental business ideas you should consider starting right now in Nigeria.
Gym
A gym is one of the best rental businesses you can start in Nigeria today, not just for the economics but also for the wide-range of businesses you can build around it.
It is however, a capital intensive business which will require a capital of between 5 to 10 million Naira, and running cost of up to 200k Naira monthly.
With the average gym subscription costing 15k Naira per month, and the average gym having a minimum of 20 users per month, a new gym business can ideally break even in 24 months.
Not bad economics if you ask me.
Vehicle Hire
You can start a vehicle hire business ASAP if you already own a personal car or a vehicle you’re currently not using.
With transport syndicates such as Uber, Bolt, and GIGm, you can onboard on these platforms and get verified to start hiring your vehicle.
The good thing about this business is that you don’t have to drive it yourself, as there are drivers on those platforms willing to work for you.
So, you could rent out your vehicle and start earning passive income on a consistent basis.
You could also add new vehicles for a cost of between 5 to 20 million, and start earning between 500k to 1 million Naira per month depending on the transport platform you’re partnering with.
Equipment Rentals
Equipment rental is in high demand in Nigeria, with rentals estimated to generate an annual revenue of 4 billion Naira.
Equipment rentals and leases include items like construction equipment, farming tools, and industrial machineries.
The business is quite capital intensive, with capital requirements reaching as much as 100 million Naira.
However, revenues from rentals and long-term leases especially could generate healthy sums to keep the business thriving.
Airbnb
The Airbnb rental model has democratized the short-stay house rental business, so much that anyone can now rent out their home and make money.
If you have a house with rooms that are yet to be occupied or you have the funds to lease flats, then you can just convert the property into an Airbnb business that generates consistent income for you.
All you have to do is take care of essentials such as furnishing, electricity, utilities, and security, and you’ll be good to go.
The average Airbnb rents for $10 per night, which equates to about $200 if filled for an average of 20 days in a month.
That’s easily 300k Naira per month and 3.6 million per year in revenue.
Cool business, eh?
Events Rentals
I have an Aunt who is into event rentals, and I can boldly say that this is one of the most underrated rental businesses you can do in Nigeria.
One would think that event rentals only involve canopies and chairs, but nowadays, events in Nigeria require rentals for almost everything.
From freezers and pots, to coolers, plates, tumblers, and even spoons.
However, this business requires a lot of networking to announce your availability and get people to trust you. So, it’s not much of a passive business where you just invest and immediately start making money.
Co-working Spaces
If there ever was a rental business that I would absolutely love to do, then it’s a co-working space.
In a co-working space, you rent out tables and chairs to individuals and businesses who work remotely, while providing a conducive work environment.
A co-working space in Nigeria is required to provide a serene work environment, wifi, and constant electricity, if they want to get patronage and make money.
You could lease out a space in a mall or even an event hall, and then design it to fit the requirements of a co-working space that people are willing to pay for.
To have a thriving co-working space, you have to find a good location, advertise availability, and organize programs to create awareness.
The average co-working space in Nigeria can accommodate as much as 30 users, with each user’s monthly subscription averaging 50k Naira.
That’s a potential monthly revenue of 1.5 million Naira.
Cinemas & Entertainment Centers
Cinemas and entertainment centers are evergreen businesses that are essential for leisure and relaxation, and they will probably never go out of business.
While cinemas rent out movies, entertainment centers rent out games and entertainment accessories.
But the good thing about these businesses is that you can build other businesses around them, such as a restaurant, a shopping Mart, or even a car wash. What a pleasant complementary business that would be!
Most cinemas and entertainment centers in Nigeria work at full-scale during weekends and holidays, and can be very lucrative if situated at a good location.
The only drawback to these types of business is the capital required to start, as they can be capital intensive.
However, you could get innovative and start small with one part of the business, and then grow from there as patronage improves.
FAQs on Starting a Rentals Business in Nigeria
Can 1 million Naira start a rental business?
1 million Naira is enough to start an Airbnb if you already have a room to let out. It can also start a local gym with few equipment, as well as an events rentals business on a small scale.
Can you start a rental business with a loan?
Of course. If you can access a substantial loan, then you can start a rental business just like you would any other business.
Do you need a license to start a rental business in Nigeria?
No. You don’t need any license to start a rental business in Nigeria. However, there are local unions you might be required to join in order to get the right network and visibility for your rental business.
Can you lease equipment and then rent them out?
Yes. That will be a smart business move. You can lease equipment in long term contracts, and then rent them out in the short-term.
What is the best rental business for a busy person?
You could go with vehicle rentals, especially with transport syndicates who are ready to manage the vehicle on your behalf.
You could also set up an Airbnb as it is easy to manage remotely once the business is up and running.
Lastly, a gym is also a good one, as it doesn’t require too much customer-facing activities. You could also set up the right technologies to monitor the business remotely.
