My last post titled Examining And Addressing Incessant And Unreasonable Increase In Rent By Rental Property Owners which was published few days ago expectedly has been a controversy and was in fact badly received by many.
Some people are not particularly happy about the post and they subjectively criticize it and their lack of objectivity was obvious and very perceptible because some ignorantly felt the post was an attempt to wrong-foot the people especially the occupiers.
Honestly before I took that audacious decision to write the post, initially I felt very ambivalent about it because I was not sure of how the people would receive it and I tried to envisage how it would be accepted or embraced as well as the reactions and criticism that might stem up due to the sensitivity of the post and I must say that I was quite aware of and prepared for the backwash of actually writing the article.
I think it is important for me to let everyone know and understand that it takes a great deal of intensive research work, time and effort to put up an article and to also bare my opinion, offering suggestion and proffering permanent solutions to some of our problems and not just band-aids as we have always seen in the past particularly on real estate topical issues and concerns of the people.
As an advocate of excellent initiatives in the real estate industry and as part of my commitment to promote creative and innovative thinking that can be adopted and applied to permanently solve some of our lingering real estate problems, issues and concerns especially as it affects the property owners and the occupiers.
For this reason, each time I see, notice or observe something wrong or inappropriate, it behooves on me to act on it and most times I research it to clarify the facts objectively as well as find out how it could be done better and I write about it the subject and share just to get people’s opinion on the issue.
I avow that I am not doing what I do to damage anybody or other real estate professional’s opinion on any of these real estate issues and topics that I have discussed or shared on this platform but to just suggest and perhaps promote great practicable initiatives most of which have achieved tremendous result for majority of the citizens of developed countries that are applying the initiatives.
The great news is that many of these initiatives empower and encourage people to take control of life by investing in real estate as well as be discipline and sensible enough to treat such property assets as investment assets which no doubt can only improve everyone’s lifestyle.
However it saddens me to say I was completely bewildered by the way some people responded and reacted to the post and if you ask me this our high intolerance to great ideas and initiatives, our unwillingness to adopt and apply a little bit of creativity, flexibility and not wanting to embrace change perturbed me.
We so much detest change because of the short term benefits and advantages a few individuals and groups get from some of this band-aid solutions and as a result we are not ready to go through the necessary and rigorous process that would bring about a lasting and permanent solution to our problems.
I must say that this nonchalant attitude of the government and our leaders to the plight of the people and of course complacency of the people on issues that can make a whole lot of difference in their life which they disregard most times necessitate my writing this post to further buttress my points on some of the issues discussed as well as clarify some facts using real life experiences to illustrate the need for government to intervein.
Over the years, many implacable foes of national progress in government have managed to and successfully obfuscate some of these real estate issues as I have stated earlier due to short time thinking or perhaps due to lack of understanding of some of these concepts, identified area of growth that can be explored as a people.
The bitter truth is that these set of individuals, who never meant well or care less for the people due to their greed and cupidity always shrug off some of these innovative ideas and creative thinking on the pretext that they are inchoate or not practicable and may not likely see the light of the day.
I want to firmly state that this untrue and many of these ideas are already been put to effective use in many develop nations of the world and has achieved astonishing result for both the government and the people. I can only surmise they find it difficult to accept most of these ideas because of their short time thinking and their easy way out approach to some of these problems.
Many of their decisions, actions and get rich quick form of leadership we operate most times don’t allow the leaders to take up programs or projects that may outlast their term in office or may be perhaps due to lack of in-depth knowledge as to how some of these ideas and concepts could really be put to use to be of great benefit to the people and the nation.
Another reason that I think may prevent them from taking these ideas seriously is that the introduction of these ideas or promulgating laws that will make them work would badly affect their interest because functional systems require integrity, patriotism, honesty, sense of belonging, moral values and taking responsibility which many of our leaders today lack.
Many of our leaders dwell in black economy, illegal activities and most times avoid paying taxes, this best explain why they keep obfuscating some of these issues each time they have the opportunity to address and implement it conscientiously.
If you ask me, our inability to take drastic actions and bold step in addressing some of our problems, apparently is responsible for our egregious social, economic and political situations and the government’s puny approach in empowering its people sends a very negative signal to the people.
This in fact contributes to the high rate of crime, display of high level of immoral and dishonest acts we see often times on social media. The atrocious act of evil display as well as the decadence in moral values of the people transgress the bounds of decency and it is high time government interveined to bring succour to the people and the nation in general.
And the best way to do this is to sincerely engage the people, support through tax benefits and encourage them to participate investing activities particularly in real estate as well as introducing some of these tested and proven ideas that has been instrumental to the growth and development of many nations particularly in their real estate industry which many ignorant and inept leaders and people may see as cockeyed programs.
Most of these ideas, programs and tax laws are designed to encourage as well as allow everyone to take advantage of the benefits, opportunities and possibilities offered by their government just by getting involved, participating and investing in real estate.
Expectedly, If all other factors remain constant, this humane gesture and windfall from the government would allow all the classes of its citizens grow, build wealth and financial stability in order to have control of their finances and be more responsible and responsive to all other government plans and projects especially in real estate at this time when most people have lost confidence in the government.
I still find it difficult to fathom why in this part of the world we still treat all property the same and I wondered why there is no clear distinction among personal property, rental property and investment property.
Many homeowners still ignorantly refer to their personal or principal property as investment property or property asset which in true sense of it is not but a liability. Some also think their rental property, which they usually eat up or fritter away all income or earnings generated barely few days after collection of rent disregarding the need for cash flow saving and expenses on maintenance, administration and day to day operation as an investment property.
Investment properties are rental properties that are purely treated as asset just like every other investment. The owners of these investment rental properties register with the government to disclose their intentions to treat their rental property as investment rental property and in the process activate the investment status of their properties and government through its magnanimous let such property enjoy special and massive tax benefits and advantages to enable them build wealth.
This rental property with investment status would be treated as such where the cashflow, expenses, income, returns on investment and profit would be recorded monthly, quarterly or at the end of the year and the property owners are allowed to take between 10% and 15% of the profit as administrative work and expenses while the balance is put in the property owner’s investment account or reinvest in another property asset.
In many developed countries of the world, tax benefits, savings, deductibles and advantages enjoyed on rental investment property by investors and homeowners are as a result of some special laws promulgated which are embedded in them, some restrictions and constraints to guide, control and regulate rental investment properties as well as help to sustain the programs to ensure the intended aim and purpose of the laws are achieved.
The law ensure the people adhere to and comply with it by consistently maintaining the status of the rental property as an investment property to keep enjoying the tax benefits and advantages.
This brings me why I wrote my last article on this platform which I titled Examining And Addressing The Incessant And Unreasonable Rent Increase By Rental Property Owners where I tried to highlight grounds and reasons property owners may increase its rent and I want to emphatically and categorically state here that I was not referring to the usual rental property their owners eat up all its earnings almost immediately but I am referring to rental properties that are completely treated as investment rental assets.
For this reason, I strongly believe if we have a system, framework or strategy that would allow this to work in Nigeria then it is very important for us to protect such investment rental properties from the negative effects of its vacancy period which may be as a result of the normal vacancy of the apartment or pending lawsuit on eviction and the delay in giving judgment by the court to take possession which sometimes may take a year or two.
And in the process, many of these unavoidable problems and challenges most of these rental investment properties are exposed to would or may if care is not taken corrode the entire investment plans, strategies and makes it extremely very difficult and nay impossible to pay down on mortgage loan debt particularly if the rental investment property was purchased through a mortgagee.
I would like to reiterate that the need to support and protect reasonable and sensible people who fall into this category and who are willing and ready to treat their rental property as investment property is paramount to me and this explains why I wrote an article on the subject and the possible introduction of vacancy lease increase in rent by government but many felt really bad and terrified about it.
I need not belabour the importance and the need for government to promulgate laws that would allow rental investment properties enjoy special tax benefits and advantages as well as allow the concept of vacancy lease increase to protect such investment to help the people build wealth to encourage many more people to invest in real estate to benefit from this opportunities.
This to me this is true empowerment and it will increase the confidence of the people in the government as well as earn the loyalty of the people if the ideas and concepts are sincerely implemented and are sustained by the government.
The primary purpose of the need for the Vacancy Lease Rent Charge is to address, augment and cushion the effects of the unavoidable rental investment property problems as a result of high vacancy rate and sometimes the delay in getting judgment to take possession of apartment in court due to eviction proceedings, which may take a year or two which more often than not destroy the property investment or instantly turn the property asset into liability as I stated earlier in this post.
Hence the Vacancy Lease is a lawful additional applicable charge that is allowed to be added to the legal or last statutory regulated rent in countries where there is a rent control and regulation laws and system in place. Most times these countries have regulated cap ceiling for rent as well as a set rate rent increase that is set or review yearly for transparency in rent charge and rent increment by homeowners.
If you understand how this concepts work, you would appreciate the creativity in the computation of lease amount to be paid on rent for vacant apartment. The amazing transparency and accountability the concepts present everyone particularly the occupiers who could on their own compute and determine the exact amount they would likely pay for any apartment of their choice without having to meet or negotiate with the owners.
Occupiers can effortlessly know what amount to be paid as rent for vacant apartment for all verifiable and registered rental investment apartments. It is easier and very convinient for anyone, group or organization who is interested in having access to the rental history of any registered apartment with the government agency in charge of rent administration in the state.
For successful compliance and implementation of the Vacancy Lease in rent concepts, homeowners must the new prospective occupier with what is known as Lease Rider or Addenda which explicitly illustrate details of all individual apartment improvement (IAI) rent increase and how the rent to be paid was arrived at to make sure that the lease increase and the previous rent increase are lawful and in confines of the Tenancy Law of the State.
I surmise these vital points of mine in soliciting and advocating for the need to help the people grow, build wealth and financial stability in order to help them take control of their finances by encouraging them to investment in real estate and of course protecting their interest in such property investment, this will enable them reduce the vacancy rate and survive the negative impact and effect of the vacancy period in the life cycle of the property simply by introducing Vacancy Lease Increase Charge.
If you miss out on the last post where I illustrated this Vacancy Lease concepts and its process and you still don’t understand the process or how it works please check out my article titled Examining And Addressing The Incessant And Unreasonable Rent Increase By Rental Property Owners for more information on it.
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