The Appraisal Of The Effect Of Property Management On Property Value (A Case Study Of Commercial Properties In Awka)

The Appraisal Of The Effect Of Property Management On Property Value (A Case Study Of Commercial Properties In Awka)

Abstract

The principal objective of property management is to maintain a property in a state to command the greatest possible net return and to protect the owner’s capital investment at all times, one unique feature of commercial properties is that they are of multiple occupation. Considering the huge capital investment in their construction, it is prudent that their efficient management should be of paramount importance. As with all forms of public properties, the management of commercial properties present peculiar problems that demand their own solutions.
The study therefore, seeks to appraise the effect of property management on property value using commercial properties in Awka as a case study.

Table Of Contents

Preliminary Page(s)

• Title page
• Approval page
• Dedication
• Acknowledgment
• Synopsis

Chapter One

1.0 Introduction

• 1.1 Background of study
• 1.2 Statement of the problem
• 1.3 Objectives of the study
• 1.4 Significance of the study
• 1.5 Scope of the study
• 1.6 Limitations of the study

Chapter Two

2.0 Literature Review

• 2.1 Meaning/Concepts of property
• 2.2 Meaning of Management
• 2.3 Concepts/Meaning of property management
• 2.4 Concepts of value
• 2.5 Rental values of commercial properties
  • Shops
  • Offices
• 2.6 Landed properties and management
• 2.7 Types of landed properties
• 2.8 Characteristics of landed property investment
• 2.9 Factors affecting property values
• 2.10 Methods of determining value
• 2.11 Obsolescence (concepts)
• 2.12 Problems of public property management in Nigeria

Chapter Three

3.0 Research Methodology

• 3.1 Sources of data
• 3.2 Data collection method

Chapter Four

4.0 Data Presentation and Analysis

Chapter Five

5.0 Findings, Recommendation and Conclusion

• 5.1 Finding generally
• 5.2 Recommendations
• 5.3 Conclusion
• Bibliography
• Questionnaire

Chapter One

Introduction

1.1 Background Of Study

The issue of property management has persisted in the Nigeria society for quite sometime. Property management is the art and science of real estate with respect to it’s development, maintenance, cash flow from users and occupiers in order to achieve optimum benefits for the owner and all parties interested in the property within the ambit of relevant laws.

It is observed that for many years. most properties have lacked proper management due to absence of qualified property managers who are professionally equipped to handle property management.

Many property owners (Landlords) do not usually engage the services of estate surveyors and valuers. They appoint “caretakers” to look after or take care of their properties. These caretakers in turn have limited powers as they can only collect rent from tenants and engage in minor repairs of the properties. Moreover, they are mostly laymen and not trained in estate management. This has affected the value of some properties in the market.

Therefore, the ability of a property to yield highest returns and posses a long physical and economic life depends on good property management. Good property management has transcended ordinary maintenance of property based on tenant’s complaints and graduated into purposeful planning of building services and efficient accounting system with due regard to the legal, economic and social interests of the tenants and Landlord alike.

If we look around and study some of the multi-storey and public properties in some of our state capitals, most especially Awka, one can easily distinguish between the well managed and the neglected ones.

Proper management of our landed properties is as important as the construction of these properties and it is vital to the economics, historical, social and cultural development of our nation and it should be accorded its due importance both privately and publicly.

1.2 Statement Of The Problem

Property developers as well as governments all over the world especially in developing countries embark on the development of properties. Although these properties were approved by the town planning authorities, they present physical, economical, environmental, financial and social problems.

Physically, the property becomes a source of discomfort to occupants due to wear and tear of the physical structure of the property. Any person looking for accommodation for residence or business may not like to take up the property that is old or lacked maintenance.

Economically, the property does not generate income as it used to when it was newly constructed.

Environmentally, these properties contribute to the degradation of the environment. They also pose a threat to people’s life as they can collapse and kill the occupants.

The social effect borders mainly on the property driving away high standard people. It was observed that these properties have turned out to become properties of low standard. All these result from poor management and lack of maintenance.

1.3 Objectives Of The Study

1. To ensure that the property is kept in a good state of repairs through regular maintenance within the estate.
2. To ensure that all those management tools such as letting, maintenance schedule, rent collection etc are properly articulated.
3. To elongate the economic life or useful life of a property through activities which tend to remove physical, economic and functional obsolescence.
4. To identity the well managed and neglected properties in the study area with a view to comparing their levels of income as well as state of maintenance.
5. To proffer necessary measures that should be taken in remedying the identified anomalies in poorly managed properties.

1.4 Significance Of The Study

The findings of this study will no doubt be of immense benefit to several state holders and interest groups in the real estate development industry.

This study will also be particularly significant to the entire society, the Anambra state government and inhabitants, as it will come out with remedial measures towards the eradication of improper management of landed properties which does no one any good.

In addition, it will be of great benefit to professionals in the building industry, real property investors, occupiers, scholarly future researcher in related areas, policy and law makers, students and a host.

1.5 Scope Of The Study

The scope of the work is limited only to commercial properties in Awka. The metropolis in question has over the years witnessed poor management of landed properties owned by both private and public bodies due to the ignorance of property owners.

Work has however been limited to the appraisal of the effect of property management on the value of commercial properties.

1.6 Limitations Of The Study

It is a fact that nothing is foolproof on earth. This position was equally the case with this study, firstly, there was the problem of logistic. Our people are known to have very poor research culture.

This was manifested in the cold attitude which some people approached for information showed and their unwillingness to fill the questionnaire given to them.

Time constraint was experienced, as there was not enough time to carryout more research on this work.

Some people were not convinced about the objective of this study and so they held back certain vital information for obvious reasons known only by them.

Financially difficulty also created hindrance as funds for transportation to source materials and fill the questionnaire posed a great problem.

All the same, the study has been carefully conducted for one to have a good insight into the subject matter.

Chapter Five

5.0 Findings, Recommendation and Conclusion

5.1 Findings

From the research conducted, the following were identified:

1. The owners of commercial properties interfere in the management of their properties by way of direct contact with the tenant and subsequent decision taking without informing the manager for advice and as such curtailing the manager’s freedom of action to deal with the property entrusted to him.
2. Some tenants are known to be rent avatars and therefore wait till the rent is squeezed out of them before they oblige in paying it resulting to loss of revenue by the mangers.
3. The duration of leases found in most of the commercial properties are very short quite untypical of what commercial property leases should be. Most managers negotiate very short leases with the tenants and this has helped some greedy Landlords to increase the rents payable by tenants and where they refuse to pay, they are evicted with the reason that the property is needed for personal used.
4. Contractor’s most of the time are exploitative in the quotations present where their services are needed are needed. They even go as far as making use of inappropriate materials, low quality finishes and sometimes obsolete machines and equipment in carrying contract jobs. This insures their being called upon often to effect repairs on the same job.

5.2 Recommendation

With due regard to the findings on the management of commercial properties in Awka, the following recommendation have been proffered which the researcher highly feels will ensure a more effective management of the properties.

1. The owners of commercial properties should be made to sign on agreement with the managers when handing over the properties to the managers.
2. The manager should make the Landlord understand that money should be set aside every year from the net income to cover the cost of future renovations. This money should be placed in a separate account hereby called the “renovations account”.
3. Where a delinquent tenant is involved, the manager should make use of the system which involves sending the tenant a reminder note, six months before his lease expires.
4. On the issue of short leases, it is hereby recommended that tenants contact their lawyers on the case of negotiating for leases and drawing up lease agreement.

5.3 Conclusion

It is the opinion of the researcher that if the recommendations proffered are given adequate considerations by management surveyors and managers of commercial properties, most of the problems relating to management of properties would become simplified and there would be an increase in the value of the properties.

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