Renting vs. Buying: Which is the Better Choice for You?

Nigerian real estate is a hot topic no matter where you are, be it Lagos, Abuja, Enugu, or a smaller town like Ibadan. And one of the most frequent questions is: “Should I buy or rent a house?” It’s an age-old debate, and each side is adamant that their option is best. The reality, however, is that there’s no single correct answer for everybody.

It’s going to depend on a multitude of factors ranging from your financial situation to your lifestyle preferences to your future goals. Therefore, before you’re swept away by the idea of being a proud owner of a Lekki mansion or that snug apartment in Enugu, let’s get down to business. By the time you’re done reading, you should have a clearer idea of what works best for you. For more insights on this decision, check out Investopedia.

Overview of Nigeria’s Real Estate Market

In order to make a sound decision, you need to be knowledgeable about the Nigerian real estate market. This is among the most profitable in the country, but it is also volatile. The value of property has appreciated greatly over the years, especially in urban areas like Lagos, Abuja, Enugu, and Port Harcourt. If you have been following trends, you will realize that it is not easy for people with limited finances to buy a home in these cities.

Let’s frame it this way:
In Lagos, a decent 3-bedroom apartment in Lekki or Ikoyi may range from ₦50 million to ₦150 million, depending on its location and what you’re getting. In Abuja, Maitama and Wuse will have about the same prices, and Kubwa or Lugbe would be cheaper. In Enugu too, the property market is growing significantly, with neighborhoods like Independence Layout and New Haven witnessing rising property values. A 3-bedroom apartment can cost between ₦30 million and ₦80 million.

But renting the same 3-bedroom apartment can cost ₦3 million to ₦10 million annually. These prices show that it takes a lot of money to buy a house in Nigeria, which not everybody can manage. Is renting therefore the better alternative? Let’s see!

Cost Comparison: Buying a House vs. Renting

It’s always said, “Renting is a waste of money! Why pay a landlord when you can buy your own home?” That does make sense, doesn’t it? But let’s look at both sides in detail. Comparing costs helps clarify the real estate decision.

The Cost of Renting

Renting is less expensive initially, which is part of the reason why it’s such a good choice for people who don’t have a lot of money. Here’s what you typically would have to pay to rent a house in Nigeria:

• Annual rent (depending on where you are)
• Agent and legal fees (around 10–20% of the rent)
• Security deposit (you can recover it, but it’s hard to recover)

For example, if you pay ₦5 million a year to rent an apartment, you can pay an extra ₦500k to ₦1 million in other fees. Nonetheless, that falls way below the massive amount of money needed to buy a house. Renting offers flexibility in neighborhoods like Lekki.

The Cost of Buying

Should you decide to buy, the main costs are:

• The price of the house
• Legal fees (5–10% of the value of the property)
• Survey and land registration fees
• Property tax
• Renovation or furnishing fees

If you buy a house for ₦100 million, you will need an extra ₦10–₦20 million for miscellaneous costs. Even if you take a mortgage, you will still need to pay between 30–50% down payment, apart from the interest on the loan. Buying builds equity but requires significant upfront funds. Check houses for sale on House Explorer.

Which one then saves more money in the long run? If you live in a rental house for 10–15 years, the amount you’ll end up paying might someday be equal to or even greater than that of buying a house. As a homeowner, you’re building equity, you can sell it, rent it out, or leave it to your kids at any point in time. However, if you’re not ready to move from place to place or aren’t ready for home maintenance, then renting would be best for you.

Who Should Rent vs. Who Should Buy?

Now that we’ve discussed the costs, let’s discuss who should rent and who should want to buy. Your lifestyle and finances shape this real estate choice. Renting suits some, while buying fits others. Here’s a breakdown to guide you.

You Should Rent If:

• You’re not yet prepared to buy a home.
• Your job makes you move around a lot.
• You value flexibility more than a long-term commitment.
• You don’t wish to bother with property maintenance or legal issues.
• You would prefer to reside in a nice neighborhood but are not in a position to buy there yet.

You Should Buy If:

• You have a good job and can afford the up-front costs.
• You’re going to be in one place for a long time.
• You would like to invest in property for long-term financial security.
• You do not wish to have to worry about rising rent fees.
• You have a good mortgage plan.

Homeownership in Nigeria is regarded as a status symbol, but it is not for everybody. For some people, they would be better off with their money if they invested it in other things and rented, instead of putting all of it into houses. Real estate investment requires careful planning. Consult real estate agents on House Explorer for guidance.

Factors to Consider Before Making a Final Decision

Before making a decision to rent or buy, take the following into consideration:

1. Financial Situation: Be real with yourself. Are you in a position to buy? If you need to borrow a lot or will have trouble making payments, renting might be the way to go for now.
2. Location & Market Trends: If you’re going to purchase, choose locations that will resell for a good price in the future. If you’re renting, consider whether the neighborhood is safe, convenient, and has the type of lifestyle you prefer.
3. Long-Term Plans: Will you be staying put any time in the near future? Do you dream of moving abroad? Your long-term plans should influence your decision.
4. Hidden Costs: Purchasing a home comes with additional expenses such as property taxes, repairs, and renovations. Renting also has unforeseen rent hikes.
5. Investment Potential: If you’re buying a home, consider if it will be capable of generating rental income in the future. A well-situated home can be a great source of passive income.

Finally, the answer to the confusing question of if you should buy or rent a house in Nigeria now depends on your finances, lifestyle, and future plans. Renting provides flexibility and lower upfront costs, whereas buying gives long-term security and a chance to invest. If you can possibly afford to purchase a home without landing yourself in financial hot water, go for it! Otherwise, leasing can be a viable and convenient alternative as you work towards saving for your own home.

In either case, the most important thing is that you make the right decision for your life and your plans. A house, after all, is more than just a structure; it’s a home where you live, grow, and make memories. Ready to decide between renting or buying in Nigeria’s real estate market? Explore verified apartments for rent and houses for sale on House Explorer to find your perfect home. Connect with trusted real estate agents to guide your property investment journey. Start making your dream home a reality today!