Creative model for home-renting launches in Lagos
12 May 2016
In Nigeria, Africa’s largest economy, many landlords demand of incoming tenants the total rent for two years in advance.
With this in mind, Obinna Okwodu, an ex-Morgan Stanley investment bank analyst and entrepreneur, launched a real estate booking start-up in Lagos that gives tenants the option to pay monthly. It is called Fibre.ng.
Rents in Nigeria can be burdening for middle-income earners, when landlords demand rent two years in advance. The launch of Fibre.ng has been greeted with much enthusiasm, as it opens renting in Lagos up to many who have not been able until now to place 24 months’ rent on the table.
However, in exchange for the convenience, tenants have to pay an amount on top of the monthly rent, which pushes their monthly rental expenses slightly over the market-related rental for properties. This convenience fee goes to Fibre.ng for its service.
Currently, the platform only covers premium residential areas of Lagos, but Okwodu plans to expand to the rest of the state.
Scaling might prove a difficult nut to crack: Okwodu will either have to build his own stock of monthly-charged apartments, or convince landlords to switch to the pricier monthly-charge model, or pay the two-year rental sum himself upfront to a landlord, and then source tenants willing to go on the monthly-charged model.