Effects of Infrastructural Facilities on the Rental Values of Residential Property

Abstract

Problem statement: Real estate developers were consistently faced with the issue of making decisions on the types of property to invest their hard earned income or highly competitive secured mortgage funds, which were attached with high lending rates. One of the different sectors that are begging for such investment is residential property development. Approach: This study evaluated the effects of available infrastructure in residential property on its rental values in Akure, Ondo state, Nigeria. Two different sets of questionnaires were designed and administered for the collection of primary data used in the study. The first set of questionnaires was for the tenants of residential property while the second set of questionnaires was administered on the practicing estate surveyors based in Akure. The questions in the questionnaires amongst others probed into the types of available infrastructure in the rented apartment, rent paid, income of household-heads and family size. Primary data collected were subjected to multiple regression analysis and the determination of the effects of each of the available infrastructure (water, electricity, access road, kitchen, toilet, refuse disposal facility, wall fence, installed burglary proof, drainage channel, daywatch-security and nightwatch-security services) on the rental value was achieved. Results: The study revealed that infrastructural facilities contributed 30.50% in the determination of rental values of residential buildings in Akure; of which the provision of wall-fence round the building and the installation of burglary proof in all the windows played the most important infrastructure. Conclusion: Property developers that want to invest in residential buildings development should endeavour to provide these two infrastructure amongst others with a view to earn attractive rental values on their residential property in Akure in particular and towns and cities in developing countries.