Investing in the real estate market of Lekki Phase 1 is full of options, each as beneficial as the other. So with numerous choices, one has the posh of finding the right fit as per personal interests, understanding, financial requirements and other aspects. Serviced apartments investment is one of the options on the table, which offers its distinct set of attractions and considerations. One can make use of this sector to good effect after understanding what the industry is about.
Hospitality Sector in Lekki Phase 1
Lekki Phase 1 is the Lagos hub for travel, tourism and a lot of other business sectors. Visitors from all over the world continue to flock into the city looking for a better lifestyle and opportunities. there’s also an excellent number of temporary visits, for business dealings and tourisms, with people seeking the simplest accommodation options. This keeps the hospitality sector of the town very vibrant throughout the year.
A simple Google search will enable you to understand the importance that hotels and other accommodation options in Lekki Phase 1. There is an enormous number of hotels, starting from economy friendly choices to the foremost extravagant and lavish ones. There are online booking systems and service providers which are always kept busy with the immense number of people looking for accommodation in Lekki Phase 1. Along with hotel rooms, serviced apartments also are in high demand as they provide the right living opportunity for visitors and ex-pats.
What is a Serviced Apartment?
A serviced apartment is an accommodation type which mixes the features of a bedroom and a residential apartment. These units have all the amenities and luxuries that a hotel apartment must feature and are spacious, with layouts like general apartments having separate bedrooms and kitchens. Serviced apartments come with varying facilities and features, and are available for short stays as well as longer ones.
These units are generally preferred by travellers and tourists alongside ex-pats having busy work schedules, which brings during a need for max luxury and hotel services. The services offered to depend upon the management company which is running a specific hotel apartment house, which generally outstrips those offered in usual residential towers.
Why Make Serviced Accommodation Investment?
Serviced apartments are an excellent choice for investors, as they equally appeal to those trying to find short stays of a couple of days to those trying to find longterm accommodations starting from six months to over a year. The high market demand and the increasing accommodation needs can ensure a never-ending, regular flow of rental income for the investors. With better services for the guests, these units are priced higher as compared to other residential properties.
Comparison with Other Property Types
If we are to break it down, the properties available for investment can be categorised as residential properties, commercial properties and serviced hotel apartments. All types of property come bring varying benefits within the sort of capital growth and rental returns. Those interested in property investments need to look at all the choices, measure their benefits as per their aims and requirements and then make the right decision. Concerning serviced apartments investment, the typical returns yielded by these properties bring a perfect investment opportunity for all.
The attractions of investing in serviced apartments can be well recognised by those involved in property management will know. Those who are new the world but curious about investing in land, here are a number of the main benefits that outline serviced apartments investment.
With a strong influx of tourists and ex-pats, the demand for serviced apartments in Lekki Phase 1 is always quite high. This great demand results in a high percentage, which ensures that you simply won’t have difficulty finding tenants for your serviced property. The apartments are going to be occupied mostly throughout the year and you won’t have long periods without getting returns. This factor is present in all the serviced apartment projects in Lekki Phase 1, but you must do further research to find the areas which have higher occupancy compared to others.
Higher Rental Prices
Serviced apartments have higher rents compared to other residential properties. So for an identical price, you’ll always expect a substantially greater from serviced apartments investment as compared to other sorts of investment properties. So those looking for good rental returns will find serviced apartments the best option for investing in the real estate industry in Lekki Phase 1.
Another benefit of entering the serviced apartments sector is that there is a well-established network which brings a regular influx of customers. Most ex-pats and tourists are tech-savvy and make use of online portals for booking properties. It is much easier with the additional involvement of local agents, this can ensure greater ease of finding tenants without long periods of wait.
Serviced Apartments Investment for New Entrants
Property investments need to be carefully managed as an excellent sum of cash is involved. Though the risks are lesser than other industries, well-researched and smart move making can help in getting the very best returns on investment. For newbies, it is important to know about all the aspects of serviced apartments investment so they can get good value to their money, time and effort.
The first thing you ought to determine is that the financing options at your disposal. You can apply for mortgage loans to finance the properties which can ease the burden of the investment substantially, as you simply have to pay about 30% of the purchase price in advance, while the rest has to be paid through easy instalments. And as serviced apartments have high rental returns, you can simply rely on the property to finance itself further.
Once you invest during a serviced apartment, you’ll offer it with two sorts of lease agreements. The choices are:
As the name suggests, these lease type is applicable once you wish to supply your property for brief periods, like for tourists that wish to remain for a couple of days or weeks. This lease type is useful when you wish to put the property to your personal use and don’t want it to be occupied all the time.
In a long-term lease, you can give the property to tenants just like general rental apartments to continue getting the returns on your investment. As the market features a strong demand for serviced apartments, you ought to choose this lease type if you would like to urge continuous earning and don’t got to use the property personally.
Things to Consider
If you’re just starting call at property investments, you would like to seem at tons of aspects to know how the industry works and the way you’ll maximise your benefit. Here are some of the factors you must look at:
The balance of prices and rental yields varies in different areas of Lekki Phase 1, so you should carefully study all the options available and select the district which can serve your interest in the best possible way.
The property developer whose property you are buying can also impact the demand, and hence, your returns. So it is vital to invest in a property by a leading developer like PERIWINKLE.
There are legal obligations to be met, firstly, to buy the serviced apartment, and then to offer it to the tenants. All the purchase and lease agreements are regulated, so it is advisable to learn about all their requirements before finding the property so you can fulfil them.
To reduce the risk and burden of investment, one can always look towards the mortgage financing options available. The financial institutions and banks offer attractive mortgage rates, through which you can conveniently finance the property. PERIWINKLE Mortgage in partnership with Fidelity Bank can help you find the lowest mortgage rates for serviced apartments investment for their properties.
Serviced apartments have higher rental returns, but lesser capital gains compared to other properties. So if you’re interested more within the income, serviced apartments are the simplest among all kinds of investment for you.
Serviced apartments investment offers a beautiful choice for all investors. One can enjoy huge returns on their investments if the right properties are invested in. Mortgage financing can be helpful to invest in properties of much higher value than your current capital, which can be easily paid of using the handsome rental earning that comes with serviced apartments.
Frequently Asked Questions
Are our serviced apartments profitable?
Serviced apartments are highly profitable in terms of income as they need higher rents and percentage compared to other property types. In terms of capital growth, they score but properties like residential apartments, villas, penthouses, and townhouses.
What is the difference between an apartment and a serviced apartment?
A serviced apartment has all the features of a regular apartment, like layouts with separate bedrooms, kitchens, living rooms and balconies. Along with that, they’re fully equipped and furnished and are available with hotel facilities like room service, cleaning etc. These hotel features differentiate serviced apartments from the standard residential apartments. For investors, another differentiating factor is that serviced apartments offer higher rental yields.
Is a service apartment considered residential or commercial?
From an investor’s perspective, serviced apartments are considered commercial properties as they are purchased with the sole purpose of earning rental income. Even once you are applying for a home equity credit, you’ll choose a billboard real estate loan because the properties are capable of yielding good returns.