Stock markets in Africa have long since attracted investors with piles of money, which witnessed a change when tech startups started paving their way, hence democratizing the investments in the stock market. Thanks to startups such as Chaka, Bamboo, and Risevest, for the first time Nigerians are able to own stocks with as little as ₦5,000 ($10).
This innovation in the Nigerian market led them to invest small amounts of money in domestic and foreign companies. Going by the same token, the introduction of Airbnb elevated the hospitality industry and made it possible for people to rent out their personal houses. This stirred a transformation in the market and allowed people to start earning with minimum investment.
This transformation is revolutionizing Nigerian real estate investment in many ways. To start with, owning a property in Nigeria is a distant dream for most. This can be related to the absence of any financing option or a suitable mortgage that demanded considerable upfront commercials. As an estimate, only 2% of Nigerians have up to ₦500,000 ($870) in their bank accounts which makes owning a property an out of reach option.
This scenario however is changing with the inclusion of Enterprise Hotel, which is offering the normal Africans an opportunity to invest in real estate with an amount as small as ₦30,000 ($52). This model, earlier used by the tech startups in Nigeria is now enabling Nigerians to own a property with minimal investment and no mortgage.
The Enterprise hotel startup incorporates three product classes for the people to choose from- first starts with the room sale, where the individual can instantly purchase a room. The second product class follows the block sale model, where the startup would divide the room into ten blocks and one individual can purchase one block. This means that as an example if the price of one room is fixed at ₦30 million one block would cost ₦3 million to the individual. The third product class is the unit sale where the Enterprise Hotel divides one room into thousands of blocks or parts. This gives an ease of purchasing to people irrespective of their income levels.
There are two ways the startup Enterprise Hotel makes money. The first method of making money is involved with the sale of rooms and the second method happens through the management fees that investors pay them. This allows the Enterprise to cover all its management costs.
Challenges and competition faced by Enterprise Hotel
Nigeria’s startup culture has seen growth mostly in the field of fintech, with a handful of other industries making a cut. Moreover, the real estate sector of Nigeria has seldom stayed in the limelight for any innovation or disruption. While some startups of the likes of Muster and Spleet came forward to solve the local people’s issue of renting accommodation, there never was substantial growth in the domain.
One of the prime reasons for this had been the lack of proper technology to solve the real estate issues and the barrier to enter this domain, where the risk is always high. Growth in the real estate sector in Nigeria is slow and it sometimes takes as long as 15 years to witness a return of investment. All these challenges held back startups from entering the domain, let alone finding innovative solutions.
This is the barrier that Enterprise Hotel is working to enter and mitigate by making affordable home renting and buying solutions to the Nigerians with a fast return of investment (as fast as 2 years). Additionally, the Enterprise Hotel will enable the investors to earn in multiple ways such as hotel bookings, daily activities, or services for the room besides its renting price. These services may include, food, drinks, snacks, dry cleaning, etc, where investors will get a cut of the total earnings.
Moreover, the most vital reason why the entire idea is lucrative to Nigerians is that buying land tends to be profitable considering it will increase in value with time.
Nigeria’s leading music figure and vocalist, Cobhams Asuquo, known for his singing and production said…
Following a mixed reaction from the South African community representatives, Khoi and San, the Cape…
Mitigating the process and service barriers in African rail transportation, the digital disruption has transformed…
Kais Saied, the Tunisian president has said in his speech that he will allow the…
You know the credibility of an ingredient when it’s plastered all over bottles and jars…
Cyclone Gombe that flooded large areas of central and northern Mozambique is consistently leading to…
This website uses cookies.