AN ASSESSMENT OF THE EFFECTS OF FACILITIES ON THE RENTAL VALUES OF RESIDENTIAL PROPERTIES IN TAMMAH NASARAWA

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AN ASSESSMENT OF THE EFFECTS OF FACILITIES ON THE RENTAL VALUES OF RESIDENTIAL PROPERTIES IN TAMMAH NASARAWA

ABSTRACT

The study assessed the effects of facilities on the rental values of residential properties in Tammah  Nasarawa, the researcher seek to identify the various types of residential property, identify existing facilities, examine the conditions of these infrastructural facilities and to assess the effects of facilities on the rental values of residential properties in the study area. The study make use of the survey design which enable the researcher to take close study of the research population and obtain all the relevant information needed through the use of questionnaire, interview, and personal observation. A total of one hundred (100) copies of questionnaires were distributed while eighty (80) were retrieved. Table and simple percentage were used to analyzed the data. The findings of the study shows that the existing infrastructural facilities in the residential properties are electricity, access road, burglary proof, kitchen and toilets and are found in good conditions while majority are not functional or unavailable. Finally the study shows that infrastructural facilities have significant effects on rental value of residential properties in Tammah and that the residents are willing and ready to pay higher rent for properties with improved facilities. The study recommends that government should provide necessary public infrastructures such as stable power supply, good water etc as they impact significantly on property value.

CHAPTER ONE

1.0       INTRODUCTION

1.1       Background of the Study

The effective economic activity in either urban or rural environment is dependent on availability of sufficient facilities such as: good road network; portable water supply system; drainage system etc (Ihuah and Benebo, 2014). While the overall importance of the availability of these facilities cannot be over emphasized; their significance in enhancing real property values, as well as promote the social and economic life of the people in that built environment can not be underestimated.

It has been observed that real estate, particularly residential properties have continued to attract the investment interest of real estate developers the world over. This is because of the increasing demand for residential properties in the urban centres (Olujimi & Bello, 2009); and because of the upward only rent appreciation which characterized real estate investments (Oduwaye, 2007). Residential property is not just ordinary shelter but comprises the facilities and other aspects of the social environment, which links man with his remote and immediate neighborhood. The importance of infrastructural facilities in a property and indeed human life cannot be overemphasized. According to Babarinde (1998), the efficiency of any form of human activity system largely depends on the provision of adequate facilities.

Adequate infrastructure contributes to attainment of physical and moral health; stimulate social stability, work efficiency and the development of the individuals.  According to McNeil, “when infrastructure works, productivity and labor  increases; when  it does not work, economic  renewal can be postponed or even  halted”.  Studies  have  shown  that  the  level  of  availability  of  infrastructure  in  most  developing countries  is drastically  low. This assertion was further reinforced by  Iremiren  (2001) who  found  that  a significant proportion of up to 34% (in some Nigerian cities) of houses had no access to electricity, water, decent and safe waste disposal systems and are unconnected by motor able  roads. These grossly impact on the return capacity of such properties.

Availability of  facilities is often one of the factors affecting the demand and choice of residential property as man is a socio-economic being seeking to dwell in residential units that provides maximum supply of necessary facilities at affordable costs. Provision of facilities that would enhance the living condition of residents within a neighbourhood is therefore very essential. Rental values of properties also vary from place to place depending on various factors among which availability of facilities stand prominent. Most often, when factors affecting rental values of residential properties are considered, the most commonly discussed factors are location, quality of building, demand and supply rate among others are the most commonly mentioned with little or no regard for the availability of public facilities and infrastructures.

Urban infrastructure covers a wide spectrum of services and facilities, namely; electricity, water, roads, walkways, waste disposal systems, communication, primary health facilities and services, schools and housing. These are more often provided by the government. Where urban facilities are adequately provided and efficiently managed productive and profitable land uses are usually attracted towards the area.

However, the problems of adequacy in terms of number available and condition, functionality, location, distance to homes, maintenance and management problems are very rampant and vary from one location to another. The closer a residential area, for instance, is to new infrastructural projects, the higher the increase in its values (Udoka, 2013). In addition, infrastructural development is the engine that drives the economic and technological growth in all ramifications. The provision, operation, management and maintenance of infrastructure are always big employers of  labour. In the same vein, the majority of economic activities rely on them to thrive. It is against this background that the effect of facility on the rental value of residential property is being assessed with a view to determining the effects of facilities on rental values of residential properties in Tammah, Nasarawa.

1.2       Statement of the Problem

The increasing rate of variations on rental values of residential properties among varying residential neighborhoods in many towns and cities in Nigeria in recent time has continue to dominate discussions within the spheres of practicing estate surveyors and valuers, property; owners, investors, users, estate brokers, as well as policy makers on housing investment and management in Nigeria.  Although various studies on factors affecting rental value of residential property have been carried out globally, identified condition of dwelling characteristics, attributes of residential location and neighborhood attributes as the leading factors that causes variation in rental value (MacDonald & MacMillan, 2007; Kiel & Zabel, 2008; Anthony, 2012), however, most of these studies are foreign base with only a handful of them conducted in some part of Nigeria and did not specifically discussed the effect of facilities on rental value of residential properties . This implies that the effect of facilities on rental value of residential property in Tammah Nasarawa was not included and thus, account for the negligible attention being given to condition of residential dwellings and neighborhood attributes by homeowners, housing investors and the policy makers. It is therefore pertinent for the researcher to assess the effect of facilities on the rental value of residential property in Tammah.

1.3       Aim and Objectives of the Study

The aim of this study is to assess the effect of facilities on the rental value of residential property in Tammah, Nasarawa.

In order to achieve this aim, the following objectives are pursued:

1. To identify the various types of residential property in Tammah Nasarawa
2. To identify the existing facilities in the study area?
3. To examine the conditions of these infrastructural facilities
4. To assess the effects of facilities on the rental values of the residential properties

1.4       Research Questions

In  a  bid  to  find  relevant  answers  that  can  be  useful  in achieving the aim of this study, the authors sought answers  to  the following questions:

1.  What are the various types of residential property in Tammah Nasarawa?
2.  What are the existing facilities in the study area?
3.  What are the conditions of these infrastructural facilities?
4.  How has the available infrastructural facilities influenced the rental values of the residential properties?

1.5       Significance of the Study

The study of the assessment of the effect of facility on the rental value of residential property, became imperative as it will go a long way in addressing many un answered questions related to residential property prices, quality and investments. Establishing the relationship that exists between rental values of residential property and the various facilities is very crucial to Estate Surveyors and Valuers, Urban Planners and policy makers alike.

This study also became very necessary considering the fact that information in respect to the impact of various facility attributes on rental value of residential properties which is obviously lacking within the domains of estate surveyors and valuers in the study area shall be explore. This apparently may provide a useful and significant guide to practicing estate surveyors and valuers in ascribing and determining rental values of residential properties in the study area. Estate agents and brokers may also find the outcome of this study very useful as it will help them to aid their decision with respect to giving advice to their client on the choice of residential neighborhood to live.

The findings of this study may also assist in drawing the attention of the government and other relevant bodies concerned with housing and environmental health in realizing the need to enforce quality housing provision and infrastructural facilities. This study is therefore necessary to assist public authorities in putting more efforts in infrastructural investment and as well take full advantage of the income that can be generated from such investment.

1.6       Scope and Limitation of the Study

For the reason of interest and available resources at researcher’s disposal, the study focused only on the assessment of the effect of facility on the rental value of residential property in Tammah. The study also focused on residential properties only and specifically those in the category of self contain, tenement, 1, 2 and 3 bedroom apartments. Due to interest, available data and time constraint, other types of property such as commercial and industrial properties were not considered. Residential properties other than the category mentioned above were also isolated because of convenience and also for the fact that the demand for the categories of apartment selected, were more frequent and stable in the study area.

            Limitations

This research work has been limited due to the following reasons;

1. The time frame available for the research work restraint the effectiveness of the research.
2. Financial constraint: Insufficient finance to execute some research’s has actually limited this project work coupled with high cost of materials in the market has made me to resort to means that will reduce cost which has affected the quality of work.

1.7       Definition of Terms

Some of the key words used in this work and their meaning as contain and used in the research are:

Infrastructure: This is seen as a wide range of economic and social facilities crucial to creating an enabling environment for economic growth and enhances the quality of life, Nubi (2002).

Property: Fraister (1993), stated that property is the subject matter of ownership that anything which belongs to a person going to exclusive right to enjoy a thing. Example being land and building, real properties, denotes interest and right inherent in the owners of the physical real estate. This cluster of right which could be made the subject of a real activities “title” that signifies the lawful right of possession.

Value: Value is basically the worth of a thing which depend largely on the basis of assessment and unit of measurement.

Property Value: property value according too Millington (1981) is the money obtainable from a person willing and able to purchase property when it is offered for sale by a willing seller, allowing for reasonable time for negotiation and with the full knowledge of the nature and uses which  the property is capable of being put.

1.8       The Study Area

Tammah is a street in Nasarawa town serving as a host community to the Federal Polytechnic Nasarawa. Tammah houses majority of the students of the institution and serve as ancestral home for the Gbagyis in Nasarawa town. Over the years Tammah has witnessed increasing investment in property development in the area of residential and commercial properties in the form of shops and houses which provides accommodation for the teaming population of students and other residences in the area.

The performance of investment properties in Tammah is believed to have grown over the years as it is clearly seen in every nook and cranny of the areas where property owners and investors strive to develop residential property in different form and shapes such as single room, tenement buildings, self contain, 1 bedroom flat, 2 and 3 bedroom flat and the likes. These structures are developed major to generate incomes for the investors as they are rented out to students and other residence of the study area in return for annual or monthly rents.The values of these investment properties have appreciated over the years as there is a steady increase in rental values. For instance, single rooms that goes for Ten thousand (N10,000) naira in 2010 now goes for over fifteen to thirty thousand (N15000-N30000) naira in 2018 (Field Survey, 2018), while properties such as self-contains, 1 bedroom flat, 2 and 3 bedroom flat have seen such increase in rental values too. With the ever increase population of students and influx of people into Nasarawa in general it believed that investment properties in Tammah will continue to experiences a positive growth and have a great return on investment for the investors and property developers (Field Survey, 2019).

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