Landlord Increase House Rent In Nigeria | Causes and Reasons.
Shelter is one of the basic needs of man. Whether rich or poor, we all need shelter and one is either a landlord, tenant or squatter. During economic hardship (recession), paying rent could be harder (in some cases impossible).
For a landlord, the messiah may be increased rent, while to a tenant, increased rent is sheer insensitivity and wickedness.
Having a good landlord at my resident has afforded me the opportunity to learn some things about the landlord-tenant relationship.
My landlord happens to be very humane and could go the length of leasing out his apartment for cheaper price.
However, his nice character has warranted the situation of not being able to increase house rent when appropriate as most of his long-staying tenants still pay almost the same amount they first paid. Of course my case may be directly opposite in your own case.
In this page we have talked about four major reason why Landlord Increase House Rent In Nigeria. When to increase the amount charged for rent has always been the most difficult situation every landlord has to face since once an agreement is signed with tenants, it becomes harder to breach the contract as it might lead to losing some of them.
However, for some solid reasons it becomes necessary for Landlord to Increase House Rent .
This way, the landlord will be able to pay for property maintenance, pay off mortgages or bank loan, pay taxes, and above all since you’re in the business to make money, you will need your profits at the end of the month or year.
Therefore, If you’re a landlord, check the following reasons whether they are why you about to increase or you already increased your house rent. Before you decide when to increase the amount you charge for rent, there are some factors you need to consider. Below are some of them.
Why Landlord Increase House Rent In Nigeria
There are some causes to the increase in the amount charges for rent in Nigeria . Below are some of them:
1. Cement Price Increase
A recent market survey by Daily Trust on Sunday in Abuja, Nasarawa, Kaduna and Niger states revealed that a 50kg bag of cement rose from N2,600 to N3,100 in late November, 2020. Checks in other parts of the country showed that the price has further risen to between N3,700 and N4,500 across the country.
In Abuja, a cement dealer in Gwarinpa, Attah Peter, noted that the increase started before the #EndSARS protest, saying a bag of cement was N2,600 and sold by dealers at N2,800, but that later distributors increased the price to N3,500 and retailers sold it at N3,700
The Nigerian Institute of Building (NIOB) also said the significant rise in cement prices in the country and the low purchasing power of Nigerians may result in a danger to building construction standards, according to This Day.
The institute has therefore called upon the government’s intervention because this has proficiently increased the affect the house rent increased in Nigeria.
2. Property Location
As a landlord, before deciding on the rental, you need to look at where your property is located. Is it in the suburb of the city or a rural setting? One important thing to note is that the rental rates in the city and away from the city are very different.
If your property is located in the city, and the rent you charge is lower, not forgetting the demands of the city and its environs, then you need to increase the amount you charge for the rent.
Similarly, if your property is located away from the city or in a remote area, then the demand in these places is not high, and also the expenses are slightly lower. It’s always good to charge a lower amount on your property in areas like these.
If you charge a higher price here, the chances are that you will end up with so many unoccupied houses, and this will give you great losses.
3. Economic Conditions
Before deciding on when to increase the amount you charge on rent, it is always good to look at the current economy of the country. When the economy is unfavorable, this might not be a good time to increase your rent.
However when the economy is very favourable, and other investors are also coming in to set up their properties and businesses in your area, then this could be the right time.
4. Building Materials Price Increase
The general direction at which prices of building materials are increasing in Nigeria was as the result of the combined effects of high interest rates, devaluation of the Naira, inflation, and non-effective distribution network of the materials.
Price increased of building materials contribute immensely to the hike in house rent, quality and cost of housing, from what is used in the foundation to the materials for roofing and finishes, while the building materials industry is an important contributor to the national economy of any nation as its output governs both the rate and the quality of construction work.
Additionally, building materials constitute the largest single input in housing construction with about 60% of the total housing expenditure used for the purchase of building materials.
On the other hand the cost of building materials constitute about 65 percent of the construction cost. Invariably, building materials form the main factors that restrict the supply of housing.
Having said that, it has been observed that one main barrier to the realization of eff ective housing in Nigeria as revealed in successive government eff orts has been the cost of housing in the country.
