In Nigeria, the dream of every man and indeed every mature adult is to have a house he or she calls his own, but unfortunately, this dream is hardly realized by everybody, hence the high level of ‘homelessness’ in the country.
Housing situation in Nigeria is critical and the numbers bandied by available statistics is quite scary. The total Number of housing units in the country is about 14 million. Out of this, over 12 million are on rent. Over 80 percent of the country’s 170 million population lives in rented apartments. All these find explanation in the high level of poverty and near absence of mortgage to offer housing finance.
If therefore home ownership dreams are hardly realized, it is understandable. But there is good news in town. Alternative route to home ownership other than buying or building one has come to the market.
Rent-to-own initiative which allows a prospective tenant to rent a house, pay rent on it over a period of time and own it is today the easiest and surest way of owning a home without passing through the rigors of building one or saving for years to buy one.
Lagos state government has launched one just as NatanelFlorens- a new entrant into the Nigerian property market- has also introduced the initiative which it has operated for over one year now.
The challenge with the Lagos model is the stringent conditions associated with it. The demand for as high as 30 percent equity contribution from the prospective tenant has swayed interest in this to other schemes considered more friendly and pro-poor.
“Our rent-to-own model is a housing solution that enables home seekers to own homes through a flexible and authentic arrangement over a period of 10 years and also allows these potential house owners to rent houses in an area with a rent regime that is within the margin in that area”, explained Yinka Daramola, an Executive Director at NatanelFlorens, said in an interview.
Daramola noted that a lot of housing models have been brought into the market but instead of helping people to own houses, they make the people buy houses as investment and in turn, rent out to others.
As an alternative asset investment company with focus on real estate services, NatanelFlorens also offers another unique investment opportunity called ‘equity release’ that allows property owners to unlock the value of their assets over a period of five years.
Two estates in Lekki and Ogudu dedicated to this scheme were surprisingly sold out in one day after they were showcased slightly through a media launch, but the company is considering building the phase 11 of those estates, and also evaluating the idea of building at Iyana Ipaja- a Lagos suburb.
“The houses we build are not for money bags but for the medium income earners”, Daramola assured, noting that rent-to-own model has been tested in various countries like US, South Africa and Brazil, and has proven to be acceptable in Nigeria in the past 12 months.
“NatanelFlorens wants to address the dichotomy between investment in the market and people owning their personal houses and to help property owners to not only optimize he value of their investment but also to add more value to their properties”, he assured.
He explained that equity allows property owners to earn almost 80 percent of the return on their assets within a period of five years adding, “this means that the owner can take away the equity from his asset to build another property which can only be sold by rent-to-own in a 10 year period in the area where the rate fits into the rent margin of the area”.
Daramola said that the products the company was offering was clearly the first of its kind in this part of the world and that it was also unique such that “it makes the tenant own the house after paying rent for some years; NatanelFlorens wants to help real estate investors to reshape their investment to earn optimal yield and allow potential home owners to own and make return on their homes”.
By Chuka Uroko