CHAPTER ONE
INTRODUCTION
BACKGROUND OF THE STUDY
Economic property location has been a challenging notion to grasp. Although the major goal of commercial properties is to generate profit, the primary goal of residential properties is to provide habitation, shelter, and comfort, land demand is a reflection of the profit or utility that may be derived from its use. The more the rent that a user is ready to pay for a given use, the greater the advantage that the user will derive from it.
In Enugu and Nigeria in general, there appear to be significant disparities in the amounts of rent passing on residential and commercial properties.
Humans require shelter in order to survive. This requirement can be met by either living in one’s own home (owner’s occupier) or renting someone else’s. The first option, owner occupation, is primarily employed to supply the demand for shelter in our conventional society. As a result of the urban centers’ emergency, the situation has changed. Many people have lost interest in owning property due to the difficulty in obtaining land and the high cost of construction. As a result, people are forced to rent other people’s homes in order to meet their housing requirements. As a result, two distinct types of urban dwellers have emerged: landlords and tenants. The renter pays a set amount to the landlord under this arrangement.
STATEMENT OF PROBLEM
This tendency has continued, resulting in “the average worker paying more.”
Rent is between 30% and 40% of his salary” (Oshadiya, 1985). As a result, the rise in property rents has resulted in a variety in property rent.
In metropolitan areas, rents tend to vary depending on the type of use that a property can provide (for example, great location), which certain properties offer above others for commercial and residential applications.
AIM AND OBJECTIVES OF THE STUDY
The major goal of this study is to look into the reasons for rental variance in commercial and residential properties in order to develop a tool that can be used to detect concerns with these properties in Enugu and Nigeria in general.
The following goals must be pursued in order to attain the standard goal:
I Determine the level of rents in the study area for both commercial and residential properties.
ii) To identify and investigate the elements that influence the rents that these assets command.
iii) To determine or investigate whether the income of prospective buyers/tenants influences their decision to purchase real estate. iv) Determine whether rental values for residential and commercial properties in the study area differ.
RESEARCH QUESTIONS
RENT: The universal dictionary of the English language (1971) defined rent as the regular payment made for the use of land or buildings that belongs to someone else. The Economist defined rent as “the revenue from land resources that is equal to the value of its marginal services rendered in a productive process” (Richfield, 1974).
In summary therefore, the word rent is that fixed periodic payment made by a tenant to his landlord for the exclusive possession and use of leased property.
PROPERTIES: According to the High Court, the Court of Appeal and the Supreme Court, property is the right to possession, enjoyment and disposition of all rights and things subject to ownership.
Property is therefore a legal right expressing the relationship between a person, the owner and his possession of the thing owned.
SIGNIFICANCE OF THE STUDY
The following groups will benefit from the findings of this study:
For starters, tenants who are charged rent for a variety of reasons, especially when the properties are similar in nature (physically). This will allow investors to learn not just how occupiers think, but also why and what factors they consider when purchasing properties for specific uses.
Second, the broader public now understands why the rents demanded by these assets must be different.
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 pique students’ interest in conducting additional research on the subject.
SCOPE OF THE STUDY
The study is limited to selected properties (residential and commercial) comprising blocks of flats and tenements in Ogui New Layout and G.R.A, Enugu, over a three-year period (2002-2004).
LIMITATION OF THE STUDY
During the data collection stage, this project encountered certain challenges, as one could expect. The topic of rent passing on a property (residential or commercial) is typically viewed as confidential information that is difficult to share with others, especially researchers. This was widely assumed 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 assurances that the exercise was solely for academic purposes, a significant number of them still harbored fears that it could be used for property rating and taxation purposes.
DEFINITION OF TERMS
RENT: According to the Universal Dictionary of the English Language (1971), rent is a recurring payment given for the use of someone else’s land or structures. Rent is defined as “the revenue from land resources that is equal to the value of its marginal services given in a productive process,” according to The Economist (Richfield, 1974).
In conclusion, rent refers to the set monthly payment given by a tenant to his landlord in exchange for exclusive possession and use of leased property.
THE RIGHT TO POSSESS, ENJOY, AND DISPOSE OF ALL RIGHTS AND THINGS SUBJECT TO OWNERSHIP, AS DEFINED BY THE HIGH COURT, THE COURT OF APPEAL, AND THE SUPREME COURT, PROPERTY IS THE RIGHT TO POSSESS, ENJOY,
As a result, property is a legal right that expresses the relationship between a person and their possessions.
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