Mr Folarin buys a parcel of land in Highlands Estate, off Kensington road. He is eager to develop his newest acquisition and in eighteen months, five semi detached houses are standing.

Enter the tenants. Mr Folarin collects part payment of the rent, hands over the keys to his new tenants over palm wine and pepper soup, and everyone is happy. Written agreements are unnecessary and stressful, the landlord and tenants agree.
It does not take long before Mr Folarin regrets the decisions he made. The tenants disturb the neighbours, damage the property and refuse to pay the balance of the rent. Mr Folarin comes back to collect the rest of the money, but the tenants refuse to pay and deny Mr Folarin access to the property. He is not interested in the rent any longer, as he wants to evict all the tenants from the property.
Can you identify at least one thing Mr Folarin could have done differently?
Every investment involves a significant amount of risk bearing and as such, every investor should put measures in place to manage such risks in a cost effective manner while maximizing profits. Landlords can deal with risks in the real estate business in the following ways:-
• Insurance policy – Landlords should consider purchasing an insurance plan to protect their property from damage arising from incidents such as fire and flood, as it would safeguard their investments. Landlords may also consider jointly insuring the property with the tenant, or having the tenant insure the property for the duration of the tenancy agreement.
• Security Deposit- This simply means a deposit to be paid by the tenant to the landlord as security and to show intention to complete the transaction. Where the landlord insists on a deposit, the prospective tenant forfeits the deposit in the event that he does not go through with the transaction.
• Tenancy Agreement/ Deed of Lease – This is a very important way to protect the Landlord as it serves as evidence of a signed contract between the Landlord and the tenant. It also spells out the duties and obligations of both parties such as the rent payable, rules of engagement within the premises, insurance policies, dispute resolution methods, and the duration of the tenancy or lease as the case may be.
• Documentation- Documentation involves keeping a log of all the transactions between the landlord and the tenant, as well as a record of the condition of the property prior to the beginning of the tenancy as well as afterwards. This can take the form of pictures videos, and other forms of documentation to help the property owner keep track of the state of his property.
• Inspection Visits – The landlord should schedule inspection visits from time to time to examine the state and condition of his property. It is important for the tenancy agreement to provide for inspection visits. However, the landlord must take care to inform the tenant of his intention to inspect the property to avoid encroaching on the tenant’s right to peaceful enjoyment of the premises, and exposing himself to legal action for trespass.
• Estate Management Services – Landlords can also hire estate managers and real estate professionals to make transactions on their behalf and manage their property.
With these steps, landlords can deal with their property and clients a lot easier and shield themselves from some of the issues faced by Mr Folarin in the illustration. Finally, it is necessary for landlords and investors in the real estate business to seek knowledge and information to be able to plan better and develop their businesses better.