APPRAISAL OF THE EFFECT OF PROPERTY MANAGEMENT ON PROPERTY VALUE (A Case Study Of Commercial Properties In Awka)
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 deman
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.
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
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
(a) To ensure that the property is kept in a good state of repairs through regular maintenance within the estate.
(b) To ensure that all those
management tools such as letting, maintenance schedule, rent collection
etc are properly articulated.
(c) To elongate the economic life
or useful life of a property through activities which tend to remove
physical, economic and functional obsolescence.
(d) 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.
(e) 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.