The Ignored Issues Scaring Away Nigeria's Housing Investors
Nigeria faces a housing deficit estimated at over 20 million units.
For decades, we’ve looked at this crisis through a single lens: construction. The cost of cement. The scarcity of land titles. The need for more buildings.
But there is a silent, structural rot at the foundation of our real estate market that has nothing to do with bricks and mortar.
It is an absence of financial control
Nigeria's rental market generates an estimated ₦36–42 trillion annually across 13–15 million rental households. That is one of the largest rental economies on the continent. And the vast majority of it, roughly 80%, operates informally.No verified tenant data. No automated rent collection. No credit reporting on rent. No insurance infrastructure built around rental assets. No data that gives lenders the confidence to offer property-friendly terms.
₦36 trillion flows through this market every year, yet most investors lack control after they invest.
The "What Next?" Problem
As a software engineer turned entrepreneur, I have spent my career looking for friction. I mean those invisible barriers that stop a system from working. When I started exploring this space, our hypothesis was simple: if landlords could verify who a tenant is and how much they earn, the trust gap would close.
We were wrong.
Early conversations with diaspora landlords increasingly relying on us to screen tenants in Nigeria revealed something deeper. After screening tenants and accepting the best candidates based on verified data, they would ask the same question: "Okay, I have accepted the best ones. But what next?"
That question—what next?—evealed the true scale of the problem.
The fear is not about choosing the wrong tenant. It is the paralysing fear of what happens after the keys are handed over.
The Billion-Naira Gamble
Imagine any other investment sector.
Would a serious investor put ₦600 million into a fintech startup on a good handshake alone? Would they fund a logistics fleet because their drivers seemed responsible? Of course not. They would demand data, audit trails, and financial controls.
Yet in the rental property sector (that requires hundreds of millions in upfront capital), property owners and managers operate without a control panel. Landlords rely on gut feelings and random paperwork because no infrastructure exists to back their decisions.
The result is that investors are terrified.
I recently spoke with an investor—let's call him Chikwa—whose experience captures this perfectly. Chikwa did not stop building new rental properties because he lacked funds. He stopped because the systemic risks became unbearable. He described the court orders and magistrate courts required to evict non-paying tenants. The indiscriminate destruction of property left him with no financial recourse.
As he put it: "We don't want to do anything because the disadvantages outweigh the advantages."
Chikwa is not an edge case.
He represents thousands of Nigerians—at home and abroad—who have the capital, the appetite, and the knowledge to invest in rental property but have rationally concluded the risk is not worth it.
What the Market Actually Needs
When property owners like Chikwa ask, "What next?" Here's what they’re really asking:
How do I protect my assets when the legal system fails me?
The answer is not more buildings. It is a financial infrastructure purpose-built for rental property investment. Specifically, three layers of it.
1. A Data Layer That Replaces Gut Feelings
Today, most landlords use generic rental application forms and accept tenants based on references, church connections, or the recommendation of a friend of a friend. This is not screening. It is hope.
The infrastructure Nigeria needs would verify tenant identity against national ID networks, analyse income patterns from bank statements, and produce a standardised report that any landlord can read and act on. Not a PDF of someone's payslip. A verified, data-backed assessment of whether this person can afford this property.
The technology to do this exists. Open banking APIs, BVN/NIN verification, and credit bureau data can all be connected into a single screening workflow. The missing piece is not technology. It is a platform that connects these services specifically for rental transactions.
2. An Enforcement Layer That Does Not Require a Lawyer
This is the real unlock.
In Nigeria today, if a tenant defaults, the landlord is functionally powerless. The court system is slow. You cannot criminalise debt. Pursuing a case through the magistrates' courts costs time and money that most landlords do not have, especially those managing property from overseas.
But the law does allow for credit reporting.
Nigeria's Credit Reporting Act of 2017 permits the reporting of payment defaults to licensed credit bureaus. A tenant who defaults on rent can have that default reported, directly impacting their credit score and their ability to access loans, mortgages, or financial services in the future.
This is not punishment. It is accountability.
The same mechanism that makes banks confident enough to lend money — the knowledge that default has consequences — can make landlords confident enough to invest in property. When tenants know that their rental payment history follows them, the incentive structure changes. Default stops being free.
No other mechanism in the Nigerian market creates this kind of accountability without requiring a court order. And when the same infrastructure that reports defaults also reports positive payment history, tenants build credit by paying rent on time. Both sides win.
3. A Financial Layer That Gives Investors Clarity
Here is a problem no one talks about: most landlords have no idea what their properties actually make.
Rent is deposited into a personal bank account. It mixes with salary, side income, and everyday expenses. Service charges come in. Maintenance goes out. Agency fees, repairs, insurance, tax — all scattered across bank transfers, cash payments, and WhatsApp receipts.
No landlord with three properties can tell you the net return on each one. They know what they collected. They do not know what they kept.
This is not a spreadsheet problem. It is an infrastructure problem. There is no system that tracks rental income and expenses for each property and automatically produces a clear profit-and-loss picture.
The infrastructure the market needs would give every property its own financial identity. Dedicated accounts that separate rental income from personal funds. Automated tracking of every naira in and out. A clear, auditable picture of what each asset produces after all expenses.
When landlords can see real returns per property, they make better decisions. They know which assets to hold and which to sell. They price rent based on actual margins, not guesswork. And when that financial history is documented and verifiable, they walk into conversations with lenders on completely different terms.
The ₦36 trillion flowing through Nigeria's rental market is not invisible; it does exist. It is invisible because no infrastructure was built to count it.
Enabling a Proven Asset Class to Flourish
Nigeria has the demand. A 20-million-unit housing deficit is growing by hundreds of thousands annually. Urbanisation is pushing more people into rental dependency every year. Nigerian diaspora sent over $20 billion home in 2024, and drives up to 70% of property purchases in Lagos alone
The capital exists. The appetite exists. What does not yet exist is the infrastructure that turns rental property from a high-risk gamble into a calculable, bankable asset class.
The housing deficit will not be solved by buildings alone. It will be solved when we build the financial infrastructure that gives investors confidence to put their capital to work.
The "what next?" question has an answer. It is data, accountability, and financial visibility. When those three things exist at scale, the investors sitting on the sidelines will come back.
That is what we are building at Tenalet.
Sokari Gillis-Harry is the founder and CEO of Tenalet, a landlord banking platform for rental property owners and managers.