Analysis of the Rate of Rent Default in Residential and Commercial Properties in Akure, Nigeria

Abstract

The increasing rate of rent default in Nigerian urban centres discourages investment in rental housing. This study analysed rent default rates between residential and commercial properties in Akure to guide investors’ decision-making. Covering a ten-year period (2014–2023), the study focused on properties managed by Estate Surveyors and Valuers. Data were obtained from 20 registered estate surveying and valuation firms with at least ten years of operation and involved 48 residential and 32 commercial tenants. Frequency distribution tables, weighted mean scores, and trend analysis were used for data analysis. Findings revealed that economic conditions were the leading cause of rent default, ranking first with a mean score of 4.50, followed by unemployment with a mean score of 3.50. Rent default was more prevalent in residential properties than commercial properties, attributed to the higher eviction risk faced by commercial tenants, which could disrupt business operations. Professional perception also identified poor landlord–tenant relationships as a contributing factor, ranking sixth with a mean score of 3.00. The study recommends conducting background checks on prospective tenants, implementing government job creation and business support programmes, and adopting rent insurance to mitigate income losses from rent default.