COMPARATIVE ANALYSIS OF RENTAL VARIATION IN RESIDENTIAL AND COMMERCIAL PROPERTIES IN NIGERIA
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COMPARATIVE ANALYSIS OF RENTAL VARIATION IN RESIDENTIAL AND COMMERCIAL PROPERTIES IN NIGERIA
Introduction: 1.1 Background of the Study.
Shelter is an essential requirement in life. An individual can meet this requirement by either occupying his own (owner’s occupier) property or renting another person’s home.
In our traditional society, the requirement for shelter is mostly supplied by the first alternative, owner occupancy. The situation has changed due to the emergency in metropolitan centres.
Many people are no longer considering owning property due to the difficulty in acquiring land and the high expense of building construction. As a result, they are forced to rent other people’s residences in order to meet their housing needs.
As a result, two kinds of urban residents have emerged: the landlord and the tenant. Under this system, the renter pays the landlord a set amount of money in exchange for the use of the owner’s home. This amount is commonly referred to as rent.
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During Nigeria’s civil war from 1966 to 1970, numerous landed properties in the metropolitan districts of the old Eastern Region of Nigeria, notably Port-Harcourt, were devastated. As a result, the availability of landed estates decreased dramatically following the war.
Furthermore, during the post-civil war period, an unprecedented number of rural people migrated to metropolitan areas as a result of the visible riches brought about by the oil boom. This resulted in a high demand for the current restricted supply of landed properties. As a result, rents for landed properties climbed significantly.
This tendency has proceeded to the point where “the average worker is paying between 30% and 40% of his salary as rent” (Oshadiya, 1985). Thus, the increase in rentals on properties has resulted in a variety in rent on properties.
Rent tends to vary in metropolitan areas due to the location advantage (for example, excellent location) that some properties have over others for commercial and residential usage.
1.2 Statement of Problem
The location of economic characteristics has been a tough subject to grasp. Although the major goal of commercial properties is to generate financial advantages, whereas the primary goal of residential properties is to provide habitation, shelter, and comfort, the demand for land reflects the profitability or utility that may be derived from its use. The greater the benefit to be gained from a specific use, the higher the rent that the user is ready to pay for it.
Rent levels on residential and commercial buildings appear to vary greatly in Port-Harcourt and throughout Nigeria.
This study aims, among other things, to determine the causes of rental variation in commercial and residential buildings in Nigeria, using Ogui New Layout as a case study.
1.3 The purpose of the study
The primary goal of this study is to investigate the causes of rental variation in commercial and residential properties in order to give a tool for detecting rent-related concerns in Port-Harcourt and Nigeria as a whole.
In order to attain the standard goals, the following objectives must be undertaken:
To determine the current rental rates for commercial and residential properties in the research region.
To identify and investigate the factors impacting the rentals charged by these buildings.
To describe the effects of rental fluctuation on decisions to purchase certain properties.
Determine the trend in rental values for residential and commercial properties in the research region.
1.4 Significance of the Study
The findings of this study will be beneficial to the following:
To begin, tenants who are charged rent for a variety of reasons, particularly when the homes are visually similar. This will again allow investors to learn not just how occupiers think, but also why and what they consider when purchasing properties for specific uses. For example, home and commercial applications.
Second, the broader public now understands why the rents commanded by these properties must differ.
Finally, this research will assist in determining the elements influencing commercial and residential properties, which is a necessary prerequisite for successful development, as well as inspiring students’ interest in conducting additional research on the topic.
1.5 Scope of the Study
The study spans three years (2002–2004) and is limited to chosen properties (residential and commercial) comprising blocks of flats and tenements in Ogui New Layout, Port-Harcourt.
1.6 Limitations of the Study
As expected, this effort encountered various challenges throughout the data collection phase. The subject of rent passing on a property (residential or commercial) is typically regarded as classified information, which is not easily divulged to anyone, particularly researchers.
This was widely suspected to be the reason why some estate surveyors, property owners, tenants, estate firms, property companies, and even estate agents who were approached through oral interviews, discussions, and visits found it difficult to reveal essential information.
Despite being told that the exercise was strictly for academic purposes, a good number of them still harboured fears that it could be for property rating and taxation purposes.
The society also created a logistical problem. The researcher worked with a very limited budget throughout the study because frequent and repeated trips to important persons and offices cost a lot of money.
Furthermore, keep in mind that some of the interview respondents were uncooperative, repeatedly playing to the gallery in order to avoid providing the requested information.
In general, however, the researcher assured that these bottle necks had no effect on the study’s conclusions because the success greatly outweighed the aforementioned drawbacks.
1.7 Definition of Key Terms
To avoid ambiguity in such a large investigation, the various concepts must be defined in order to distinguish between operational and constitutive definitions. Constitutive definition entails replacing the notion or construct under definition with additional concepts or structures.
Operational definition necessitates assigning a form of meaning to the notion or construct that will be carried throughout the investigation (Asika 1999).
Facilities management in the hotel industry is described as the proactive management of built facilities and organisational assets to increase efficiency and add value to their performance and services (Okoroh, Jones, and IIozor, 2003).
This is consistent with Alexander’s (1996: 1) description of ‘the process by which an organisation offers and sustains support services in a quality environment to meet strategic needs’.
This study draws on these two definitions to propose that facilities management, as applied to the property industry, is the proactive management of facilities, support services, and organisational assets to improve efficiency and add value to the core accommodation they provide for their customers in order to meet organisational strategic goals.
In the context of real estate, facilities include buildings, industrial kitchen equipment, restaurants, halls of various types, central air-conditioning systems, fans, lifts, lifts, electrical installations, escalators, bakery equipment and leisure facilities such as golf courses.
This is generally consistent with the Royal Institution of Chartered Surveyors’ Facilities administration Skill Panel’s (1993) [cited in Owen, 1993] claim that FM consists of the administration of support services, property, and information technology.
This research completely embraces this description and, as an exploratory study, focusses on the three (support services, property, and information technology) as they apply to property organisations. Rental Variation
Property Effectiveness
Effective property management integrates resources and activities to create the property environment required for organisational success. At the business level, it helps to achieve strategic and tactical objectives.
On a daily basis, effective property provides a safe and efficient working environment that is critical to the establishment’s performance. It also gives the consumer with what he wants and needs at a price he is willing to pay, while the property sells itself. Rental Variation
Property stakeholders include investors, general managers, workers, facility managers, and property users/customers. Commercial properties
Management Style
This refers to the property asset sustenance method that is used in the operation of the property, which could be maintenance management, property management, or facilities management.
Operational excellence: Torkildsen (1992) defines this as everything or everything done to satisfy client expectations while also meeting organisational goals and objectives in a sustainable manner. This definition is used to describe how this study operates.
Support services: In many organisations, they are functions that serve as an add-on to the main services. For property firms, some activities generate money while others are part of the overall package.
They include mail services, fleet cars, catering, reception, cleaning, and office administration, as well as garbage disposal, reprographics, parking lot management, horticulture, and porterage. This is consistent with the schedule of support services indicated by Owen (1995).
Strategic Estate Management
According to Aakers (1984:6), strategy is “the development of a sustainable competitive advantage with which to compete in a chosen product/market”.
However, in accordance with Thorncroft’s (1965) perspective and for the purposes of this study, strategic estate management refers to property asset management decisions that determine the overall direction of a business and its ultimate viability in light of the predictable, unpredictable, and known and unknown changes that may occur in its most immediate surrounding environments, which are considered sustainable. Such decisions may involve facility management, sales and leasebacks, and changes in the use of important buildings.
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