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From underestimating ongoing upkeep to overlooking legal safeguards, these errors can turn expected rental income into a source of constant stress. By learning from others missteps you can protect your investment, maintain steady cash flow and build a strong reputation.
Below are 5 mistakes that new Nigerian landlords frequently make along with practical advice on how to avoid them and ensure smooth profitable tenancies.
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1. Underestimating ongoing maintenance expenses
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Many landlords focus only on purchase price and initial repairs then budget too little for routine upkeep. Roof leaks, faulty wiring, clogged drains and worn fixtures can escalate into major bills that far exceed small reserve funds.
To avoid surprises, set aside at least ten percent of annual rental income for maintenance and engage a reliable handyman on a fixed retainer for minor jobs.
2. Skipping formal tenancy agreements
Relying on verbal agreements or simple promises leaves both parties exposed. Without a detailed written contract landlords cannot enforce rent increases, pet policies or repair responsibilities and tenants may contest evictions or deposit deductions.
Use a comprehensive lease that specifies payment schedules, notice periods, deposit terms and dispute resolution processes then have it reviewed by a property lawyer.
3. Mispricing rent
New landlords often set rent based on what they paid for the property rather than local market conditions. Charging too much drives away good tenants while charging too little means leaving money on the table.
Research comparable homes in your neighbourhood factoring in proximity to transport utilities and security. Aim for a rent that covers expenses delivers a healthy yield of six to eight percent annually and remains attractive to renters.
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4. Neglecting tenant screening
Inexperienced landlords may rush to fill vacancies accepting tenants without confirmation of employment creditworthiness or rental history. This can lead to late payments, property damage or abrupt move outs.
Implement a standard vetting process that requires proof of income past landlord references and a simple identity check to confirm reliability before handing over keys.
5. Overlooking insurance and legal compliance
Assuming the property is risk free, tenants or natural events can cause significant losses. Landlords who skip insurance and ignore statutory requirements expose themselves to fire flood theft and regulatory fines.
Obtain a landlord insurance policy that covers building damage and liability then ensure all land registry and ground rent payments are up to date.
By avoiding these common errors new landlords can optimise rental returns, reduce vacancy periods and foster positive relationships with tenants creating the foundation for a successful property portfolio.
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