DETERMINANTS OF VARIATION IN RESIDENTIAL PROPERTY RENTAL VALUES IN MINNA, NIGERIA.

Abstract

ABSTRACT It has been observed that variation exists in residential property rental values of similar residential properties across neighbourhoods within the geographical area. This study examined the determinants of variation in residential property rental values in Minna, Nigeria. The population for the study comprised of rented residential properties and tenants who are the household heads occupying the residential properties in Minna as well as registered Estate Surveyors and Valuers firms in Minna. Purposive Sampling technique was used to pick the tenants and twelve registered Estate Surveyors and valuers firm, a total of 250 questionnaires were administered on the occupants of tenanted residential properties in the study area by neighbourhoods while 185 questionnaires were validly and completely filled and subsequently used for the analysis. Geometric mean was used to obtain the rental growth rate for the period of study for two bedroom and three bedroom flats. Standard Deviation and Coefficient of Variation, Relative importance index (RII), Simple Descriptive Statistics were adopted in achieving the set objectives. The study revealed that rental trend for three bedroom flat within the study period changed from1.59% in 2011 to 8.36% in 2017 and later in 2020 dropped to 4.61%. For two bedroom flat within the study period changed from 1.51% in 2012 to 7.92% in 2017 and later dropped to 5.59% in 2020. This indicates that the variation was more in 2017 across the neighbourhoods. The variation showed the average rental value of two bedroom flats within the study period having 24.4% for Bosso town ranking the highest while Chanchaga is having 13.03% as the lowest level of variation. For three bedroom, Shango has the highest with 18.9% while Fadikpe has the lowest with 9.9% level of variation. The study also revealed that various factors are responsible for the variation in rental value but not limited to the factors, these are the physical, location and neighbourhood characteristics of residential property which determine the rental values of residential property in the study area. The various factors played major role influencing tenants’ choice of accommodation in the various neighbourhoods across the study area The study went further to reveal the dominant factors influencing tenants’ choice of accommodation in each neighbourhood of the study area which include condition of the building, size of the building, number of bedrooms, number of toilets and bathrooms, quality of the neighbourhood, direct access to tarred road and presence of tertiary institution, banks and public offices. Therefore, landlords seeking optimum return from their residential property investment should focus on improving the physical and structural characteristics of the property like the condition and size of the building, number or toilets and bathrooms and also number of bedrooms.