Factors Affecting Commercial Property Rental Value

Factors Affecting Commercial Property Rental Value

1. Accessibility: Commercial property that is easily accessible will have a high rental value them one sited in an area that is adjoining properties. This has to do with the effort of the other properties that surround the commercial properties. A commercial properties (that is located in an area of only residential property, the rental value of such property will be low.

2. Facilities: This is another factors of commercial property that tends to influence its rental value. A commercial property that is located where all the necessary facilities needed to make life comfortable are present in the area, the property will commands higher value than one which has inadequate facilities.

3. Location: The location of a commercial property influence its rental value to a great extend. In a situation were there is provision of good road, social amenities, infrastructural facilities and adequate convenience, the rental value will be high Udechukwu (2006).

Attribute of Commercial Property Value

Value is created by and varies with changing factors in its relationship.

(1) Utility: Utility could be describe as the usefulness of an item and this usefulness is a significant quality that greatly enhance value. It is the satisfaction the purchaser or buyer of a property derived from it.

(2) Scarcity: There must be an element of scarcity in supply in order for the property to command value regardless of its utility, otherwise, it will be a free goods.

(3) Future Satisfaction: This is the expected flow of return or satisfaction from the acquisition of a property. For example, the expected flow of return in a property may be considered in terms of the rent that will be acquired if the property is let or sell.

(4) Capable Of Ownership: Real property, apart from being bought into use, must also belong to some one either by way of purchase or long lease.