A Comparative Analysis of Rental Variation on Commercial and Residential Properties in Ogui New Layout and GRA, Enugu.
AIM AND OBJECTIVES OF THE STUDY
The main aim of this research is to examine the reasons for rental variation in commercial and residential properties with a view to provide tool to be used in catching issues related to rent on these properties in Enugu and Nigeria generally.
To achieve the standard goal, the following objectives are to be pursued;
- To identify the level of rents for commercial and residential properties in the study
- To ascertain and examine the factors influencing the rents being commanded by these
- To determine or examine whether the income of prospective buyers/tenants affect their decision to acquire
- To ascertain if there is disparity in rental values for residential and commercial properties in the study
- To find out the rate of demand between commercial and residential properties?
CONCEPTS OF PROPERTY
LEGAL MEANING AND CLASSIFICATION OF PROPERTY
Property is the subject matter of valuation. Like value, it is a word of common usage, but unlike value, property, has a precise legal meaning. Both the exact meaning of property and its nature have strong bearing on valuation. What thesis meant by the word property?
In popular imagination and common usage, property suggests possession, or better still, the belongings of a person which he can deal with as he likes. This accord with the Latin derivation of property, “properties”, “proritus”, meaning, one’s own, (Ajayi, 1998). In law property is defined as the highest right a man can have to anything, being that highest right a man can have to anything, being that right while, one has to lands or tenements, goods or chattels which does not depend on anthers courtesy. (Hill, 1961)
Property in law has three different connotations:
- The Right of Ownership: Where a man lends his goods to a friend, the property is still the man’s own. While the goods are with the friend, the property in the goods remains in the lender. We thus speak of property in land, which is in the possession of another. This includes right to use, right to alienate, right to assimilation, right to succession, right to claim to title.
- The Objective of Ownership: It may be said that certain goods are the property of a certain many or speaking of land, that the property of one man adjoins the property of another, or that the property may consist either of immovable things, such as Lander of movable things as coined
- Valuable Things: Such as assets or things which can be owned and which can be turned into money or assessed at a money value. In other words, rights and assets, which may be exchange for the ownership of money, are valuable and therefore property. It is the last sense that the word property seems to be used when a man speaks of all his property, or of his real as opposed to his per soured property.
MEANING OF PROPERTY FOR APPRAISAL
Appraisal usage peteives property as importing into itself all these ingredients, both in law and common usage, namely tangible, intangible and Rights, ownership, monetary value and legal assertion.
We can thus define property for valuation purposes:
“Corporeal and incorporeal, tangible and intangible things, capable of pecuniary and legal assertion, over which ownership gives control” (Ifediora 1995). The meaning of the word property, when used in connection with value and valuation, is closely associated with the idea of ownership. In fact, a “valuation” can be defined as the determination of the monetary value at some specific date, of the property right encompassed in the ownership. (Ifediora,1993) These right are the exclusive rights to possess, to enjoy, and (in some case) to dispose of a thing owned. Property rights devolve on the legal concept of ownership.
INTRODUCTION / RESEARCH DESIGN
Research design is a strategy or approach to be used for conducting a scientific enquiry, a research design is a plan or blue print that specifies how data relating to a particular problem should be collected and analyzed.
In this study, a research survey was conducted to supplement other sources of data; this includes textbooks, journals and other printed materials. Survey research studies both large and small population to discover the relative incidence, distribution and interrelation of sociological and psychological variables. Survey research is more reliable for this study because it enables samples to be selected from the entire population in other to analyze data, which would allow the researcher to make references on characteristics of the identified population.
Therefore, a well-constructed questionnaire was used to pose relevant questions to the respondents.
BRIEF DESCRIPTION OF THE STUDY AREA
The researcher covered Ogui New Layout and G.R.A in Enugu. Ogui New Layout located at the North of Enugu has a high population density. Commercial and residential properties are found in this area but much more of commercial properties. This area comprises of the low income earners and few high income earners.
Government Reserved Area (G.R.A) on the other hand is located at the North of Enugu. It’s mostly for residential use. High income earners are mostly found here as they can afford to transport themselves at a high cost from their area to the central business district for work or business transactions.
POPULATION OF STUDY
The population of the study comprises the population of Ogui New Layout and G.R.A in Enugu and limited to them alone. The population of study is 115 (one hundred and fifteen) respondents. (I.e. Landlords/Owners of commercial properties-50, Landlords/Owners of residential properties-50, Estate Surveyors and Valuers of both properties-15).
DATA PRESENTATION AND ANALYSIS
This chapter deals with the presentation, analysis and interpretation of the data collected by the researcher in the course of carrying out the research. The presence of data makes no meaning to anybody unless adequate analysis of such data is carried out. The research is based on the analysis of questionnaires, field survey, and interview.
SUMMARY FINDINGS, RECOMMENDATION AND CONCLUSION
From the research carried out, the following findings were derived
- That rent passing on residential properties varies/differs from the rent passing on commercial properties as indicated in figures 1 and
- That there is a positive change between rent and the use to which a property is
- That there is a higher demand for residential properties than commercial properties in the study
- That the rent of residential and commercial properties varies due to some factors like location, condition of the properties, demand for property/land use, price of construction materials, and size of the
- That the level of rent for residential properties is higher than that of commercial properties.
The research findings provide working tools in estate management practice in relation to determination of property values. It is therefore, recommended that:
- The practicing Estate Surveyors and Valuers should know that in fixing of rent, the rent passing on residential and commercial properties should not be the
- Property owners should always make rent passing on residential properties a bit higher than rent passing on commercial properties largely on the account of the use the property is
- Owners of properties should always put their properties to its highest and best use which as the findings revealed could be residential or
- Rent for commercial properties are best measured by per square metre (M2) while rent for residential are measured taking into consideration the number of rooms or flats
From overall result of this work the reality is that there are certain factors that affect rent paid on properties. These factors determine the increase or decrease in rent charged by landlords. From this, it is not possible to say that the rental value of a property is the exact rent charged on the property because there are several factors that can affect rent charged. Similarly all properties in a certain area do not command the same rent because it is not the same factors which affect one property that affects the other. In every property one looks at the factors surrounding it, before determine that rent it can command.
Considering these factors, it is now possible that the rent paid for one property will not be the same for the other. One significant factor that brings about differences in rent is the use to which a property is put.
Conclusively, the result of the analysis indicates that rent passing on residential properties is higher than the rent passing on commercial properties.
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