Dennis Isong: What’s the ROI on Lagos Real Estate?

ROI, or Return on Investment, in real estate refers to how much profit you make compared to how much you invested. In simple terms, if you buy a property for ₦10 million and sell it for ₦15 million after some years, your ROI is 50%. If you rent it out and earn ₦2 million annually, your ROI is 20% per year.

But in Lagos, ROI isn’t always so straightforward. It depends on where, when, and what you buy.

Location, The First Determinant

Lagos is not one single market. There are the high-end axes like Ikoyi, Banana Island and Victoria Island, where a 4-bedroom apartment can go for hundreds of millions. Then there’s the emerging mid-range and growing outer zones like Ajah, Sangotedo, Ibeju-Lekki, and Epe, places that used to be far but are now real estate hotcakes.

In Ikoyi, your rental ROI might be around 5–7% per annum, but capital appreciation could be slower because prices are already high. In contrast, in Ibeju-Lekki or Epe, you might buy land for ₦1.5 million and see it rise to ₦4.5 million within five years; that’s 200% growth.

But not every plot triples in value. Sometimes it grows slowly. Sometimes the area drags. That’s why you need to understand the trends.

Timing and Patience

Many people want to buy land today and cash out next year. It doesn’t always work like that. Real estate appreciates over time. Even in Lagos, the speed of ROI depends on development and demand.

If you bought a plot in Ibeju-Lekki in 2017 when it was going for ₦600,000, you’d be smiling today as it now sells for ₦4 million or more in some estates. That’s a massive ROI. But that’s over 7–8 years. So yes, the ROI on Lagos real estate can be fantastic, but it favours those who are patient and strategic.

Rental Income Potential

If you build a 3-bedroom flat in Ajah and rent it out for ₦2.5 million per annum. If your building cost was ₦25 million, that’s a 10% ROI per year (excluding maintenance and taxes). Now imagine you do a short-let model in Lekki Phase 1, where you can charge ₦80,000 per night in peak seasons. With strong occupancy, you could be earning ₦20–30 million annually on a well-managed apartment.

Of course, these figures depend on your setup, location and management. There’s also competition. But the fact is, real estate in Lagos can give you passive income that grows with time.

Hidden Costs and Realistic Expectations

Real estate, everywhere, has its challenges. You may encounter issues like omo onile drama, hidden documentation costs, infrastructure delays, or even real estate scams. All of these can eat into your ROI if you’re not careful. Also, don’t expect miracles. A 10–15% annual ROI from rentals is decent. Land appreciation of 50–200% over 5–10 years is excellent, depending on the area. But some places stagnate. That’s why due diligence is key.

So, How Much Can You Really Earn?

• Buying land in emerging areas (like Epe, Agbowa, Igbodu, or Ketu-Epe): Initial investment could be ₦1–2 million. In 5–7 years, that land might go for ₦5–6 million. That’s 200–300% ROI over time.
• Buying a finished apartment in Lekki and renting it out long-term: You might earn 7–10% annually on your total investment.
• Doing a short-let in Lekki Phase 1 or Ikate: With good management, you could hit 20–30% annual ROI—but it requires effort.
• Flipping land or property: If you buy in bulk and sell in smaller sizes, or buy distressed properties and renovate them, you might make a 25–40% profit in a year or two.

But don’t forget taxes, agent commissions, maintenance, and vacancies.

Land Banking

If you’re not ready to build or manage tenants, there’s another way to earn passively in Lagos real estate: land banking. It’s the age-old method of buying land now, holding it, and selling later when demand rises. This is how many of Lagos’ early investors made serious wealth—not by flashy buildings, but by owning the right land at the right time.

In places like Epe, Ketu-Epe, or even parts of Badagry and Agbowa, land banking is quietly creating millionaires. A plot bought for ₦1 million today might be worth ₦4 million in five years. You don’t need to develop it right away. Just fence it, secure the title, and wait. If you’re strategic, land banking offers one of the highest ROIs with the lowest day-to-day stress.

This strategy works best when you partner with reputable real estate firms or agents who know the terrain and can guide you on growing corridors. Not all lands are created equal.

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