Assessment of Factors Influencing Variation in Rental Value of Residential and Commercial properties in Birnin Kebbi

CHAPTER ONE: INTRODUCTION

1.0           Background to the Study

 Shelter is a basic necessity in life. An individual can satisfy this need by either occupying his own (owner’s occupier) property or renting another person’s property. In our traditional society, the need for shelter is mainly met through the first alternative that is owner occupation (Jiboye 2006). With the emergency of urban centers’, the situation has changed. Many people are no longer about to own property because of the difficulty in the acquisition of land and the high cost of building construction. Therefore, they are left with the alternative of renting other people’s properties in order to satisfy their need for shelter. Consequently two classes of urban resident have emerged, the landlord and the tenant under this arrangement the tenant pays to the landlord a certain amount of money in consideration for his use of the landlord’s house, (Alabi, Okunola, Dabara and Odewande 2012). This amount is popularly known as rent.

The change in status of Birnin Kebbi town from local government headquarters to state capital has lead to high demand for landed property within the town. This is the result of rural population trooping into the urban centres due to the conspicuous prosperity in the area. This resulted to high demand for the existing limited supply of landed properties. Consequent upon these, rent for landed properties increased considerably. This trend is not unconnected to the fact that in urban area prime locations have advantages over other locations and so rent for commercial and residential properties tend to vary.  It is against this background that this research intends to carry out a comparative analysis of rental variations in residential and commercial properties in Birnin Kebbi.

1.1       Statement of the Problem

Location of economic properties has been a difficult concept to understand. Although the primary objective of commercial properties is the derivation of financial gains, while that of residential properties is for habitation, shelter and comfort, the demand for land is a reflection of the profitability or utility derivable from its use. The greater the benefit to be obtained from a particular use, the higher the rent that the user will be willing to pay for it.

There appear to be wide ranging differences in the levels of rent passing on residential and commercial properties in Birnin Kebbi and Nigeria generally.

This research is seeking among other things to find out the causes of rental variation in commercial and residential properties in Birnin Kebbi, Ahmadu Bello way and G.R.A as a case study.