• By Ozioma Dike
• Nigerian Real Estate Market Insights

Top 5 Nigerian Cities for High Rental Yields in 2024: Where to Invest Now

Introduction

With Nigeria’s inflation hitting 28.9% (Q1 2024) and the stock market underperforming, real estate remains a powerful hedge for smart investors. But not all cities deliver equal returns. While Lagos and Abuja dominate headlines, emerging hubs offer up to 12% gross rental yields – doubling the national average. We analyzed occupancy rates, infrastructure projects, and rental trends to reveal Nigeria’s top 5 cities for rental ROI in 2024.

(Source: Nigerian Bureau of Statistics, Central Bank of Nigeria Quarterly Reports)

1. Port Harcourt, Rivers State

Why Invest Here?

• Average Gross Yield: 9–11%
• High-Demand Areas: GRA Phase 1–5, Trans-Amadi, Rumuokoro
• Key Drivers:
  • Oil & gas corporate tenants (Shell, Total, NLNG expats).
  • Scarcity of luxury apartments (70%+ occupancy for 3-bed units).
  • New road projects improving access to Onne Port.

Entry Strategy:

• Focus on secure gated estates (demand premium: +25% vs. standalone).
• Target 2-3 bedroom apartments (avg. rent: ₦2.5M–₦5M/year).
• Avoid: Waterfront properties (erosion risks).

2. Ibadan, Oyo State

Why Invest Here?

• Average Gross Yield: 8–10%
• High-Demand Areas: Bodija, Jericho, Oluyole Estate
• Key Drivers:
  • Academic influx (UI, IITA, LAUTECH staff/students).
  • Lagos spillover (45-min rail link to Lagos via Red Line).
  • Affordable land prices (50% lower than Lagos).

Entry Strategy:

• Student rentals: 1–2 bed flats near universities (ROI: 11%+).
• Short-term leases: Target consultants at IITA/industrial parks.
• Hot Tip: Land banking along Lagos-Ibadan Expressway (future commercial corridor).

3. Abuja (Outskirts): Lugbe & Kuje

Why Invest Here?

• Average Gross Yield: 7–9%
• High-Demand Areas: Lugbe (along Airport Road), Kuje
• Key Drivers:
  • Federal civil servant relocation (lower-cost zones).
  • New airport terminals boosting hospitality rentals.
  • Landmark infrastructure: Abuja Light Rail Phase 2 (2025 completion).

Entry Strategy:

• Mid-income apartments: 3-bed duplexes (avg. rent: ₦1.2M–₦2M/year).
• Serviced Apartments: High demand from aviation/construction workers.
• Avoid: Unplanned layouts without C of O.

4. Abeokuta, Ogun State

Why Invest Here?

• Average Gross Yield: 10–12%
• High-Demand Areas: Isheri, OPIC Estate, Kobape Road
• Key Drivers:
  • Proximity to Lagos (1hr drive via Lagos-Ibadan Expressway).
  • Industrial boom (Dangote/Procter & Gamble factories bringing workers).
  • Low property taxes (vs. Lagos).

Entry Strategy:

• Factory staff housing: Studio/1-bed units near industrial zones.
• Fractional investments: Co-own estates targeting Lagos commuters.
• Critical Check: Confirm Ogun State building approvals (avoid "Agbara issues").

5. Jos, Plateau State

The Dark Horse

• Average Gross Yield: 11–13%
• High-Demand Areas: Rayfield, Anglo-Jos, Rantya
• Key Drivers:
  • Tourism revival (hospitals, universities, and cool climate attracting retirees).
  • Low entry cost (₦15M for a 4-bed duplex vs. ₦80M+ in Lagos).
  • Security improvements (30% drop in incidents since 2023).

Entry Strategy:

• Medical tourism rentals: Furnished homes near JUTH/Evangel Hospital.
• Agricultural land leases: High demand from greenhouse farms.

Critical Investment Pitfalls to Avoid

1. Overlooked Due Diligence:
   • Verify titles with the Plateau State Land Registry (Jos) or Ogun State Ministry of Lands.
2. Infrastructure Promises:
   • Don’t bank on unapproved projects. Focus on existing roads/rail links.
3. Local Management:
   • Partner with local property firms for tenant screening/maintenance.

Why Rental Yields Beat Capital Appreciation in 2024?

• Inflation Shield: Rental income adjusts faster to naira devaluation.
• Liquidity: Easier to exit than land banking (avg. 3–6 months vs. 3+ years).
• Lower Entry: Co-investment models allow ownership from ₦5M.

Conclusion: Diversify Beyond Lagos!

Nigeria’s rental market is evolving – and 2024 rewards investors who look beyond traditional hubs. At Tech City Real Estate, we offer:

• Yield Forecast Reports: City-specific ROI projections.
• Verified Properties: Pre-vetted for titles, occupancy, and infrastructure.
• Managed Investments: Hands-off rental income with our partner network.