ABSTRACT
Specialized properties are classes of proprietary bud wants which fall outside the general range of residential, commercial and industrial properties.
These properties have no comparable in the noble market, they lack rental evidence and they are not easily adapted to alternative uses.
Valuation of specialized properties poses a very tedious task for the values because of its specialized nature. It needs wider experience coupled with the availability for data and involves huge & capital outlay to build up.
The challenges associated with valuation of specialized property with a case study Hope Alive Trust Hospital, Idofian, Kwara State, would aim of revealing all the task and challenges that are involved in the valuation.
Furthermore, appropriate method for the valuing such specialized property shall be employed to determine the capital value of the said property.
Finally relevant recommendation will be made in order to ensure efficiency in the valuation exercise of a such property.
TABLE OF CONTENTS
Title Page i
Certification ii
Dedication iii
Acknowledgement iv-v
Table of Content vi-ix
Synopsis x
CHAPTER ONE 1-9
1.0 Introduction 1-2
1.1 Background of Study 2
1.2 Statement of Research Problem 2
1.3 Aim and Objectives 2-3
1.4 Significance of the Study 3
1.5 Scope of the Study 3
1.6 Limitation of the Study 3
1.7 Study Area 4-6
1.8 Definition of Terms 6-9
CHAPTER TWO 10-20
2.0 Literature Review/Conceptual Framework 10
2.1 Valuation Concept 10-11
2.2 Purpose of Valuation 11-12
2.3 Method of Valuation 12-14
2.4 Types of Property 15-16
2.5 Development Requirement of Specialized
Property. 16-19
2.6 Specialized Property as an Investment 19-20
CHAPTER THREE 21-24
3.0 Research Methodology 21
3.1 Introduction 21
3.2 Source of Data Collection 21
3.3 Primary Source 21
3.4 Secondary Source 22
3.5 Target Population 22
3.6 Sample Frame 22
3.7 Sampling Techniques 22
3.8 Methods of Data Collection 23-24
3.9 Method of Data Analysis 24
CHAPTER FOUR 25-32
4.1 Data Presentation and Analysis 25
4.2 Construction and Material Used for Calvary
Baptist Church 25
4.3 Interpretation of Data on Facilities 26-27
4.4 How the Property is Being Managed 27
4.5 Facilities within the Study Area 27
4.6 Valuation Exercise 27-28
4.7 Sketch of the Total Floor Area of the
Church 29
4.8 The Need for Serious Adjustment in the Valuation of Different
Types of Properties 30-32
CHAPTER FIVE 33-35
5.0 Summary, Conclusion and Recommendation 33
5.1 Summary of Finding 33
5.2 Conclusion 33-34
5.3 Recommendation 34-35
REFERENCES
APPENDIX: PICTURE
CHAPTER ONE
INTRODUCTION
1.0 BACKGROUND
OF STUDY
According to Baun &
Mackin define valuation as the act and science of estimating the value of interest
in property.
Valuation is a science
and art: Its is science because it is involves the use of scientific method and
technique d it is an art because it is not science and also involves the use,
its imagination to express ideal. Valuation involves attributing vale to land
and landed property. It involves computation valuation van be required for many
purposes. Valuation is carried for specific period so from these facts
valuation can be comprehensively defined as the science and art of attributing
value to land and landed property through the process of collecting data, and
computing it, for specific purpose and for a particular period of time.
Valuation can be carried
out for residential, commercial, agricultural, industrial and specialized
properties. Therefore valuation requires expertise’s, skills and technical
competence of the practitioner which make the valuation report to be a type of
technical report.
As a result of these
requirement, a valuer needs to process sound knowledge and undoubted skills,
furthermore, substantial portions of the private, corporate and private wealth
of the world consist of real estate. The very magnitude of these fundamental
resources in our society creates a need for informed valuation to support
decision pertaining to the use of and deposition of real estate and the right
inherent in the ownership.
Specialized properties
are of various categories depending on the applicable valuation techniques.
Profit and account method is normally used for such properties as hotels,
cinemas,, town halls, hospitals, while petrol filling station and agricultural
properties have their own approaches as well. Other category of specialized
property can be valued using replacement cost method.
1.1 STATEMENT
OF RESEARCH PROBLEM
Valuation of specialized
properties often poses a lot of problems because of its uniqueness in nature
and due to the fact that they are not always sold and bought frequently in the
market. Apart from these two facts, they still back mental evidence and
comparable. As a result of these facts a lot of skills are required in its
valuation. And also all the valuation process must be duly and thoroughly
followed.
1.2 AIM
AND OBJECTIVES
This project work aim at
examining the challenges associated with valuation of a specialized property.
OBJECTIVES
1.
To identify the various type of property
in the study area
2.
To examine the structural component of
property in the study area.
3.
To access suitable method to carryout the
valuation of property in the study area.
4.
To access the problem associated with the
valuation of the property and recommend a reasonable subjection in solution to
the problem.
1.3 SIGNIFICANT OF THE STUDY
The significant of the
study is to find solution to the challenges associated with valuation of
specialized property.
Secondly, the
recommendation will serve as solution to the problem encountered in the
valuation of specialized property.
It’s also a course or
research materials for other researchers who want to study on challenges
associated with valuation of specialized property.
Furthermore specialized
properties valuation involves a lot of challenges and posed a lot of problems
for the person and who face the task of estimating its value i.e the valuer.
1.4 SCOPE
OF THE STUDY
There is always a limited scope in any
research work. The scope of the research is therefore based on the challenges
associated with valuation of specialized property using HOPE ALIVE TRUST
HOSPITAL Idofian as a point of reference.
1.5 LIMITATION
OF THE STUDY
This dissertion has been
subjected to a lot of clog and constraint among which are:-
a.
Lack of adequate fund
b.
Lack of adequate time for collection of
data and analysis.
c.
Inadequate of previous work on the thesis
of data and analysis.
d.
Lack of proper record.
1.6 STUDY AREA
Ilorin is located about
256km. north east of Lagos and 80km, from the NigerRiver at Jebba. It is
strategically located as the “gateway” between the northern and southern part
of Nigeria. The city was formally part of the ancient old Oyo Empire (Oyo Ile)
under the Alaafin of Oyo.
Ilorin is believed to
have been founded between 1600-1700AD there is no element on the origin of the
town while some believe it was founded by “Ojo Isekuse” a hunter from Oyo Ile,
otherscontended that it was founded by lettering, afonja’s grand father.
The name of the town,
Ilorin came from either “Ilo-irin” (sharpening of iron) of from “Ilu-irin” (the
town of the elephants). This conjecture is based on the presence of a rock
traditionally used for the sharpening of iron in the city and the presence of
elephants in the area in the past.
Idofian is a populated placed in Kwara State Nigeria
with the region forth code of Africa, middle East. It coordinates are 80
22’60N and 40 43’0E in degree seconds 0r 8.38333 and
4.71664. Idofian is located in Nigeria about 319km west of Abuja the country’s
capital town, the local time zone is named Africa/Lagos. Idofian town is first
hamlet with few houses before it is developed a little as it is. In Idofian
today we can see schools, hospitals,
radio station, hotel, guest house, churches, mosques e.t.c that is why Hope
Alive Trust word Assembly is choosen as a case study for my project.
Hope Alive trust hospital
is located within hope Orphanage Home, an off shoot of word Assembly church in
Idofian, Ifelodun Local government area of Kwara state around Ilorin axis. Hope
orphanage home is a house provided for the children that are abandoned or that
their parent don’t have the power financially to take care of them. This
children, some of them have health challenges that is why hospital is built
within the Home that is hope orphanage home for the care of the children and it
is also a benefit for the town Idofian.
Hope alive trust hospital
building, foundation was laid in April 2012 at Idofian, Kwara State Nigeria (a
predominantly Muslim community). By April 2015 however, the front half of the
hospital was completed and useable stocked with initial medical equipment that
same year and medical outreach was held at the hospital using the front half.
This hospital is to remain opened post- Hope alive trust mission with volunteer
staffing.
Word Assembly itself is a
founder of Pastor and Mrs. Omolehin that also have a lot of the church and
orphanage home round the globe.
1.8 DEFINITION OF TERMS
There are some common
terms used in valuation however some of the pertinent terms are discussed
below.
1.
Value:-
this is the highest price estimated in terms of money which a property will
bring of expose to sale in the open market allowing a reasonable time to find a
purchase who buys with the knowledge of all the uses to which the property is
adopted and from which its capable of being used (Ring 1970).
2.
Rental value:-
this is the annual or periodic payment for the use of land and buildings. In
fixing rental values, the valuer not only put into consideration the rent on
the subject property but also rent on comparable properties within the
vicinity. But it is essential that the appreciates the economic factors
governing the rents, which will enable him understand fluctuations in rental
values and on advising on the reasonableness or otherwise of existing rents and
market price. (Bola, 1999).
3.
Income:-
is the amount realized at the end of a transaction (Sunday 2001).
4.
Outgoings:-
costs incurred by the owner of an interest in property. Usually calculated on a
yearly e.g management, repairs, rates, insurance and rent payable to the holder
of a superior interest, as appropriate to his contractual or other abilities
it’s prudent to make annual provision for future items involving expenditure at
intervals of more than one year. (Kuye 2000).
5.
Virtual rent:-
is the rent paid plus the annual equivalent of any capital sum that may have
expended on the premises from time to time. Thus virtual rent is a term use to
designate the equivalent annual cost of property to occupies in cases where
capital has been paid in live off or addition to rent. Ifediora 1998.
6.
Premium:-
according to oxford dictionary define premium as an amount to be paid for a
contract of insurance.
7.
Risk rate of return on capital:-
this is an important “clause which any reasonable investors be it in landed
property or not, would likely to consider in a process of going into any
investment. The fact is related to the capital yield which gives an indication
of the degree risk attacked to an investment. (Alabi 2012).
8.
Depreciation:-
(Alabi 2012) define depreciation as a method of allocating the cost of tangible
asset over its useful life. When a new building, plant or machinery is built or
purchased, the value will be depreciating year by year
9.
Obsolescence:-
according to Merriam Webster described as when an apparent of an estate has
little or no value its existence. This could be classified into three types
which a physically, functional and economic obsolescence. (Kuye, 2000).
10.
Open market value:-the
best price at which an interest in a property might reasonable be let or sold
in the market by private treaty assuming, there is a willing seller and willing
buyer, a reasonable period to negotiate
the sales and the property will be freely exposed to the market. (Ifediora
1998).
11.
Plot:-
a small portion of land that is used or intended for a special purpose. Any one
of the marketable parcels into which a treat of land is divided upon plotting.
(Olayowa 2002).
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