COMPARATIVE ANALYSIS OF RENTAL VARIATION IN RESIDENTIAL AND COMMERCIAL PROPERTIES IN NIGERIA
1.1 BACKGROUND TO THE STUDY
The study of rental variation of real estate investment, whether residential or commercial, is very important at this time when emphasis is on investment performance analysis in many parts of the world. This is even more important in Nigeria where only few studies have been carried out on the rental variation in residential and commercial property achieved by property investment. Moreover the impact of the ongoing changes in the global and local economy on the value of real estate investment is serving to highlight the need for its careful consideration in the investment decision making process (Palmquist, 1980).
Since 1990s, the demand for commercial outlets has risen astronomically in most urban centers in the country. This is as a result of the economic recession which compelled the unemployed and public servants to explore trading activities in addition to their normal jobs. The investors’ reaction to this development has been to increase the number of commercial outlets at the expense of residential property developments. Therefore in many towns and cities of Nigeria, open spaces within the vicinity of public institutions have been irrationally developed to accommodate shops and other retail outlets. The situation is further compounded with the perceived notion among Nigerian property investors that commercial property performs better than residential property investment (Smith, 1986). However, the investors can no longer base their decision on intuitive grasp of the market which Ajayi and Fabiyi (1984) considered inadequate for success in property ventures. The central theme of this study therefore is to examine the rental variation of residential and commercial property investments in the study area. This will provide for better investment decision and risk management for real estate investors in Nigeria. Commercial properties are properties generally occupied for the purpose of carrying on a trade or profession in the expectation of realizing profit. They comprise mainly of shops, offices, showroom among others and they command the highest rent out of the other types of properties uses. Rent provides the basis of value for landed property and the trends in Land values are of significance in the prediction and determination of income from real property. Also, the income realizable from real estate is required in evaluating the viability of projects. A number of factors combine together in determining changes which property values undergo which are of great concern to the Estate managers and valuer.
1.2 STATEMENT OF THE PROBLEM The issue of fair valuation of residential and commercial real estate properties has been a major challenge in Nigeria. Indeed, not much has been done in the area of valuing residential housing units and commercial/business complex in the economy. Nevertheless, in recent times, the literature on real estate has seen a number of techniques and models developed in a bid to achieve efficient valuation of residential houses. The use of artificial neural networks has been the most popular and recent in this regards. In the advanced economies, the use of artificial neural networks is now predominant in several fields including tax assessment, medical diagnosis, bank risk analysis, stock analysis & control, traffic control, and real estate valuation etc (Moral - Esperanza, 2004).
In Nigeria, unlike in many other economies, the use of artificial neural networks (ANNs) in actual valuation of housing units has not been done (Eriki & Udegbunam, 2008). It is against this background, that this study examines the fairness or otherwise, of the price fixing mechanism for residential and commercial properties in Nigeria. 1.3 OBJECTIVES OF THE STUDY The following are the objectives of this study:
To examine the rental variation in residential and commercial properties in Nigeria. To analyze the factors that influences the value of residential and commercial properties in Nigeria. To determine the reasons for rental variation in residential and commercial properties in Nigeria.
1.4 RESEARCH QUESTIONS
What is the rental variation in residential and commercial properties in Nigeria? What are the factors that influence the value of residential and commercial properties in Nigeria? What are the reasons for rental variation in residential and commercial properties in Nigeria?
1.5 HYPOTHESIS HO: There is no variation in the rental value of residential and commercial properties in Nigeria. HA: There is variation in the rental value of residential and commercial properties in Nigeria.1.6 SIGNIFICANCE OF THE STUDY The following are the significance of this study
The findings from this study will enlighten the general public on the current value of residential and commercial properties in Nigeria. It will also educate on the factors that enhanced rental variation in residential and commercial properties. It will further educate on the differences between the real estate investments thereby acting as a guide for decision making. This research will also serve as a resource base to other scholars and researchers interested in carrying out further research in this field subsequently, if applied will go to an extent to provide new explanation to the topic.
1.7 SCOPE/LIMITATIONS OF THE STUDY This study on the comparative analysis of rental variation in residential and commercial properties in Nigeria will cover the present value of residential and commercial properties in Nigeria which will form the basis for comparison.LIMITATION OF STUDYFinancial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.
REFERENCES Ajayi, C.A and Fabiyi Y.L (1984). “A critique of property investment feasibility and Viability appraisal reporting in Nigeria”. Quarterly journal of administration April/July, 161-169 Eriki PO, Udegbunam RI (2008). Application of neural network in evaluating prices of housing units in Nigeria: A Preliminary investigation. J. of artificial Intell. 1(1): 21-27. Palmquist RB (1980). Alternative techniques for developing real estate price indexes. Review of Economics and Statistics. 62(3): 442-448. Smith HC (1986). Inconsistencies in appraisal theory and practice. J. of Real Estate Research. Fall. 1(1): 1-17.
Chapter three of the research project or the research methodology is another significant part of the research project writing. In developing the chapter three of the research project, you state the purpose of research, research method you wish to adopt, the instruments to be used, where you will collect your data, types of data collection, and how you collected it.
This chapter explains the different methods to be used in the research project. Here you mention the procedures and strategies you will employ in the study such as research design, study design in research, research area (area of the study), the population of the study, etc. You also tell the reader your research design methods, why you chose a particular method, method of analysis, how you planned to analyze your data.
Your methodology should be written in a simple language such that other researchers can follow the method and arrive at the same conclusion or findings.You can choose a survey design when you want to survey a particular location or behavior by administering instruments such as structured questionnaires, interviews, or experimental; if you intend manipulating some variables.
The purpose of chapter three (research methodology) is to give an experienced investigator enough information to replicate the study. Some supervisors do not understand this and require students to write what is in effect, a textbook.A research design is used to structure the research and to show how all of the major parts of the research project, including the sample, measures, and methods of assignment, work together to address the central research questions in the study. The chapter three should begin with a paragraph reiterating the purpose of research. It is very important that before choosing design methods try and ask yourself the following questions: Will I generate enough information that will help me to solve the research problem by adopting this method?
I think the most appropriate in methods versus methodology is to think in terms of their inter-connectedness and relationship between both. You should not beging thinking so much about research methods without thinking of developing a research methodology.
Metodologia or methodology is the consideration of your research objectives and the most effective method and approach to meet those objectives. That is to say that methodology in research paper is the first step in planning a research project work.
Example of methodology in research paper, you are attempting to identify the influence of personality on a road accident, you may wish to look at different personality types, you may also look at accident records from the FRSC, you may also wish to look at the personality of drivers that are accident victims, once you adopt this method, you are already doing a survey, and that becomes your metodologia or methodology
Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident. The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter. Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)
Your methodology should aim to provide you with the information to allow you to come to some conclusions about the personalities that are susceptible to a road accident or those personality types that are likely to have a road accident.
The following subjects may or may not be in the order required by a particular institution of higher education, but all of the subjects constitute a defensible in metodologia or methodology chapter.
Click here to complete this article - How To Write Chapter Three Of Your Research Project (Research Methodology)
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