COMPARATIVE ANALYSIS OF RENTAL VARIATION IN RESIDENTIAL AND COMMERCIAL PROPERTY IN NIGERIA
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COMPARATIVE ANALYSIS OF RENTAL VARIATION IN RESIDENTIAL AND COMMERCIAL PROPERTY IN NIGERIA
CHAPITRE ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Shelter is a basic human need. This requirement can be met by either occupying one’s own (owner’s occupier) property or renting another person’s property. In our traditional society, the requirement for shelter is mostly satisfied by the first option, owner occupancy. The scenario has changed due to the emergency of urban centres.
Because of the difficulties in acquiring land and the high expense of building construction, many people are no longer interested in owning property. As a result, they are forced to rent out other people’s homes in order to meet their basic needs for housing.
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 using the landlord’s home. This sum is commonly referred to as rent.
During Nigeria’s civil war, which lasted from 1966 to 1970, numerous landed estates in the old Eastern Region of Nigeria, including Enugu, were devastated. As a result, the availability of landed properties fell precipitously following the war.
Furthermore, due to the visible riches brought about in the metropolitan region by the oil boom, the post-civil war period saw an unprecedented number of rural population trooping into urban areas. As a result, the existing limited supply of landed properties is in high demand. As a result, the rent for landed properties climbed significantly.
This pattern has maintained, with the result that “the average worker is paying more.”
As rent, he should pay 30% to 40% of his wage” (Oshadiya, 1985). As a result of the increase in rentals on properties, rents on properties have varied.
Due to the location advantage (for example, prime location) that some properties give over others for commercial and residential applications in metropolitan areas, rent tends to vary depending on the type of use that a property can offer.
1.2 STATEMENT OF THE PROBLEM
Economic property location has been a challenging notion to grasp. Although the major goal of commercial properties is to generate financial advantages, while the primary goal of residential properties is to provide habitation, shelter,
and comfort, the demand for land is a reflection of the profitability or utility that may be derived from its use. The greater the advantage from a specific use, the higher the rent that the user is ready to pay for it.
There appear to be substantial disparities in the levels of rent passed on residential and commercial buildings in Enugu and throughout Nigeria.
This study aims to discover the causes of rental variation in commercial and residential properties in Nigeria, using Ogui New Layout and G.R.A as a case study.
1.3 PURPOSE AND OBJECTIVES OF THE STUDY
The primary goal of this research is to investigate the causes of rental variation in commercial and residential properties in order to develop a tool for detecting difficulties connected to rent on these properties in Enugu and Nigeria in general.
The following objectives must be pursued in order to attain the standard aim;
i) Determine the level of rents for commercial and residential properties in the research region.
ii) Determine and investigate the factors impacting the rentals demanded by these properties.
iii) To determine or investigate whether the income of prospective buyers/tenants influences their decision to acquire properties. iv) Determine whether there is a difference in rental values between residential and commercial properties in the research area.
v) What is the rate of demand for commercial and residential properties?
1.4 RESEARCH QUESTIONS
i. What is the average rent in Ogui for business and residential properties?
Between 2002 and 2004, was there a new layout and a new G.R.A?
ii. What factors influence the rentals passed on by those business and residential properties? iii. Does the income of prospective buyers/tenants influence their decision to purchase property?
Is there a difference in rental value or rent passing on residential and commercial properties in the studied area?
v. Which of the properties put up for commercial and residential usage is in more demand?
1.5 SIGNIFICANCE OF THE STUDY
The following groups will benefit from the study’s findings:
For starters, tenants who are charged rent for various reasons, particularly when the properties are of the same sort (physically). This will allow investors to learn not just how occupiers think, but also why and what they evaluate before acquiring properties for specific uses.
Second, the general public may now comprehend why the rents demanded by these properties must differ.
Finally, this research will aid in determining the elements influencing commercial and residential properties, which is a necessary pre-requisite for successful development, as well as inspiring students’ interest in conducting additional research on the topic.
1.6 SCOPE OF THE STUDY
The study spans three years (2002–2004) and is limited to chosen buildings (both residential and commercial) consisting of blocks of flats and tenements in Ogui New Layout and G.R.A, Enugu.
1.7 LIMITATIONS OF THE STUDY
This experiment encountered various challenges throughout the data collection stage, as was to be expected. The subject of rent passing on a property (whether residential or commercial) is typically viewed as classified information that is not easily shared to individuals, 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 visitations found it difficult to reveal essential information. Despite repeated assurances that the exercise was strictly for academic purposes, a good number of them still harboured the fear that it could be for property rating and taxation purposes.
There was also the logistical issue caused by society. Throughout the study, the researcher worked with a very limited budget because frequent and repeated trips to important people and offices cost a lot of money.
Furthermore, keep in mind that some of the interviewees were uncooperative, as they continued to play to the gallery in order to avoid providing the necessary information. However, the researcher guaranteed that these bottle – necks had no effect on the study’s conclusions because the success much outweighed the disadvantages listed.
1.8 OVERVIEW OF THE STUDY
The first chapter covers the project’s introduction. The second chapter is devoted to a literature review, the third to research methods, the fourth to data presentation, analysis, and interpretation, and the fifth to findings recommendations and conclusions.
1.9 DEFINITION OF TERMS
RENT: The worldwide dictionary of the English language (1971) described rent as a recurring payment given for the use of someone else’s land or structures. Rent was described by the Economist as “the revenue from land resources that is equal to the value of its marginal services rendered in a productive process” (Richfield, 1974).
In essence, rent is the fixed periodic payment given by a tenant to his landlord in exchange for exclusive possession and use of leased property.
PROPERTY: Property is defined by the High Court, the Court of Appeal, and the Supreme Court as the right to own, enjoy, and dispose of all rights and things susceptible to ownership.
As a result, property is a legal right that expresses the relationship between a person, the owner, and his possession of the thing held.
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