Should You Pay Your Rent Monthly or Yearly?

Rent

Rent Monthly or Yearly, rent paying is done periodically at agreed intervals between a landlord and tenant. It can be weekly, monthly, yearly, or as agreed. Monthly and yearly payments are the most common intervals used, however the majority of landlords in Nigeria choose to receive payments yearly. In some instances, landlords give tenants the option to choose the interval they want for rent payment.

Should You Pay Your Rent Monthly or Yearly?

Rent Monthly or Yearly

There are quite a number of factors you should consider before you agree to pay or receive rent monthly or yearly. Like two sides of a coin, we will show you the heads and tails of monthly and yearly payment of rent for any property.

Average rent in Nigeria

Payment of rent in Nigeria varies but we will discuss about prices of rent in Abuja. Abuja is has many prime location like Asokoro, Maitama, Wuse, Jabi and more.

Average prices of rent in Naira

LocationAverage PricesMaximum PricesMinimum Prices
Maitama District31,000,000 700,000,000500,000
Wuse30,000,00058,000,0004,000,000
Asokoro16,000,000600,000,000400,000
Utako13,000,00080,000,0003,000,000
Guzape12,000,000500,000,0001,700,000
Jabi12,000,00080,000,0002,500,000
Katampe12,000,000180,000,0002,500,000
Wuye10,000,000550,000,0001,500,000
Jahi9,900,000360,000,0002,500,000
Kado7,000,000360,000,0004,000,000

If you want to rent a house, you can also check with us to guide you. Book a call now

Monthly Rent Payment 

Monthly rent payment, as the name implies, refers to payment of rent month to month. The default payment day is the first of each, but it can be agreed on by both parties or selected by the landlord. 

Reasons why you should consider monthly rent payment in Nigeria include: 

  1. Flexible pay: Paying monthly helps you spread your funds over time because you do not have to pay a lump sum at once. This reduces the financial strain that comes with paying rent. 
  2. Ease of moving on: In a situation where a person is no longer interested in the property or is moving to another city, they do not have to consider unspent rent as compared to yearly rent where they might still have months left unused.
  3. Easy negotiation: It is easier to negotiate payment time and amount of rent with a monthly pay contract than a yearly pay. This is because it is a smaller amount, not a lump sum.
  4. Financial growth: Paying rent monthly gives room for financial growth because you get the opportunity to grow your funds through investments or other means as opposed to paying a large sum for rent upfront.
  5. Leveraging tool: Tenants who pay monthly can use delay in rent payment as a leverage against their landlords in cases where there is a breach of contract on the part of the landlord. Hence making the landlord respond on time so they can get their payment.
  6. For the landlord: Monthly pay provides them with cash at hand per time, as opposed to waiting for a longer period to receive funds.

Some setbacks of monthly rent payment are:

  1. It is cumbersome: For both tenant and landlord. The tenant has to remember to include into their budget and pay their rent every month, which may be stressful overtime. While the landlord has to ask for his rent monthly which may be distressing in case of late payments.
  2. Easier quit notice: It is easier for a landlord to serve a monthly tenant quit notice as opposed to a tenant who pays yearly, because the signed agreement is for a shorter duration, making the tenant homeless in a short period.

Yearly Rent Payment 

Yearly rent payment follows the cycle of 12 months, which is usually scheduled for an agreed date in the year. This date may also be agreed on by both parties or chosen by the landlord.

  1. Convenience: There is a convenience that comes with paying rent once a year because you do not have to bother monthly about payment. Added to this is financial security, because you can divert  funds to other uses.
  2. Long term financial planning: For people who plan their finances each year will benefit from yearly rent payment giving them the opportunity to tick off other items from their financial plan for the rest of the year 
  3. Stable payment amount: Due to the rising cost of living in Nigeria, a number of landlords may make attempts to increase the rent for their properties. If an individual pays rent yearly, they have to wait till the following year to effect an increase. The case is different for a monthly tenant who will have no choice but to pay the increase the following year.
  4. Longer time for a quit notice: If a yearly tenant is served a quit notice, they by default have a longer time before they are to vacate the house than when compared with a monthly tenant 
  5. Fosters bond: Tenants who live in a yearly rent apartment tend to form bonds with one another because they have higher chances of living together for a long period. Though, this may also be a disadvantage if there are frequent disputes amongst them.
  6. For the landlord: Landlords here receive lump sums which can be used to run large projects. Also, the burden of frequent rent demands is absent from them

Downsides to yearly rent payment are as follows: 

  1. Decreased flexibility: some tenants may find it financially overwhelming to pay a large sum at once. Some have gotten into financial debts because of this. Without prior savings, a good number of people cannot afford yearly rent 
  2. Difficulty in moving on: Imagine a situation where a man pays his one year rent then six months into it, he has to leave that city he is faced with the decision of forfeiting the remaining six months, refusing to leave town or demanding for a refund. Most landlords in Nigeria do not easily give refunds because of the loss they will suffer.
  3. Lower maintenance: Because landlords receive rents yearly, it may be difficult for them to attend to maintenance needs that arise during the rent year because they may have exhausted the money. This is however peculiar for houses that do not pay a separate maintenance fee from the rent.

Should You Pay Your Rent Monthly or Yearly? While this article is not exhaustive on the advantages and limitations of monthly and yearly rent payment, it is a proper guide to help you choose when you want to rent properties. In summary you should consider:

  • Your financial status
  • Your type of employment
  • Negotiating power
  • Long and short term plans

After you consider these, weigh the advantages and disadvantages of each before you make your decision.

Remember A.I Realant , your number one real estate company in Abuja, Nigeria is here to guide you as you make your decisions.

Join The Discussion

Compare listings

Compare