11 DIVERSIFIED AREAS OF ESTATE MANAGEMENT DISCIPLINE: PART 1

Estate Management as defined by Thorncroft. M (1965) is “the direction and supervision of an interest in landed property with the aim of securing an optimum return. This return need not always be financial but may be in terms of social benefit, status, prestige, political power or some other goal or group of goals”

From the definition above, it is very obvious that the real estate management practice is a multi-facet discipline encompassing diverse areas of land and landed properties, law, economics, business management, accounting, valuation, projects, construction and investment.

Oftentimes have I heard people referring to the real estate management discipline as a “Jack of all trade profession”. My agreement to this statement is based on the diversified areas which estate management practice covers in Nigeria. Also, as other courses of study such as Medicine and Law have diverse areas of practice, so also does the real estate management discipline too.

As true as this statement is, people still see estate agency as the only area of practice of Estate Surveyors and Valuers because they don’t know or know little about other areas of real estate management practice.

I am writing this post in order to identify and explain the diversified areas of estate management discipline to you so as to broaden your knowledge about the various specialist aspects of estate management practice, and also to buttress my point further about the real estate management profession not been about estate agency alone as most people in Nigeria assume it to be.

The diversified areas of estate management discipline in Nigeria are:

·         Real Estate Agency

·         Property Management

·         Facility Management

·         Project Management

·         Feasibility and Viability Appraisal

·         Property Valuation

·         Real Estate Investment Appraisal

·         Property Auction

·         Property Development

·         Real Estate Law and Arbitration

·         Property Rating and Taxation

1.         REAL ESTATE AGENCY

This is one of the major areas of real estate management practice that is widely known to people in Nigeria, as it helps to cater for all their accommodation and housing needs.

It is an important aspect of real estate management practice as it involves all matters relating to;

·         Buying and selling of land and landed properties

·         Leasing and sub-leasing of residential/commercial properties

·         Creation of landlord/tenant relationship

·         Site selection and development

·         Market value opinions for buyers and sellers of real estate assets

·         Marketing of land and landed properties

·         Market rent opinions for landlords and tenants

·         Preparation of lease agreements

·         Tenants’ screening and selection

·         Price negotiation for sales and acquisition of all land and landed properties.

2.         PROPERTY MANAGEMENT

Apart from the quality and standard of construction materials used to build any class of properties, the other major factor that helps to increase the durability, aesthetic and monetary value of such properties is adequate property management/maintenance activities. 

The concept of property management as an aspect of estate management discipline involves identifying and putting in place various ways by which land and landed properties as an investment holding will be properly managed to the barest minimum in order to maximize streams of income emanating from such property as well as enhance its value. 

In the real estate management discipline, property management involves;

·         Management of various classes of residential and commercial properties

·         Undertaking major/minor building maintenance/renovation works and repairs

·         Tenant screening and selection on residential and commercial properties

·         Scheduling routine and periodic inspections on managed properties

·         Carrying out schedule of property condition prior to tenants moving into the property

·         Carrying out schedule of property dilapidation prior to tenants moving out

·         Rent collection and remittance to property owner

·         Preparation of lease/tenancy agreement

·         Negotiating lease renewal terms with tenants

·         Continuous update on the state of property and tenants’ needs to the landlord/investor

·        Advising property owners/investors of the best market rent obtainable on their property investment holding

3.         FACILITY MANAGEMENT 

Facility management is another subset of estate management discipline that is primarily concern with supporting business organizations irrespective of their size and scope to focus on the core competencies of their business activities, which in turn contributes to broader business and financial goals through managing and maintenance of the organization’s non-core business activities.

Barrett and Baldry (2003) defined facility management as “an integrated approach to operating, maintaining, improving and adapting the buildings and infrastructure of an organization in order to create an environment that strongly supports the primary objectives of that organization”

A situation where real properties and facilities/assets of an organization are not properly managed will indirectly have negative impacts on the performance of core business activities of such organization. 

This is so because real properties and facilities have the potential of contributing meaningfully to the performance and working process of a business environment in a cost effective manner.

4.         PROJECT MANAGEMENT

Project Management Institute (2004) defined a project as “a temporary endeavour undertaken to create a unique product, service, or result”.

The concept of project management as an area of real estate management practice is on the premise of construction project activities been carried out by all the appointed allied professionals in the built environment discipline, on a particular project from conceptualization stage to completion stage.  

The estate management graduate is trained in the various project management techniques and tools needed to successful supervise and monitor any type of construction projects from inception to final stage.

Project management as an area of estate management discipline also involves supervision and monitoring of construction project activities by the project manager to create a unique product, service, or result which in this context are different classes of landed properties for the project owner/initiator.

5.         FEASIBILITY AND VIABILITY APPRAISAL

Property development activity is not something that can just be embarked upon over night without taking into consideration all the various factors that will determine the outcome or failure of the project.

Feasibility and viability appraisal in real estate management practice involves carrying out extensive research on the various issues that are pertinent to the successful completion of the proposed project.

A well written feasibility and viability report will help reveal to the project initiator/owner if the proposed development will be a failure or success, as it will highlight all the likely problems and risk factors that might break or make the entire project.

Feasibility and viability appraisal of a proposed project also identifies all cost implications of the entire development project in the face of socio-economic conditions/factors and how they can be sought out.

6.         PROPERTY VALUATION

This is another core area of estate management discipline in Nigeria as it  involves the act and science of estimating/determining, at a particular point in time and for a specific purpose, the monetary worth or value of an interest in land and landed properties, plant and machineries, furniture and fittings, equipments and/or even goodwill.

Property valuation as another core area of estate management practice involves application of various methods of valuation to determine and establish an opinion of value/worth of land/landed properties been valued. A combination of two or more of these methods can be applied during a valuation exercise but this will be based on the motive/purpose of the valuation exercise as well as its basis.

The five common methods of valuation been used to establish an opinion of value/worth are;

·         Comparative method

·         Profit/Account method

·         Contractor’s method

·         Residual method, and

·         Investment method

 Continues……..

ABOUT ME

I am a Higher National Diploma (HND) holder of Estate Management from the prestigious Yaba College of Technology, Yaba, Lagos state, Nigeria. I also possess a Professional Practice Certificate in Estate Surveying and Valuation from the Nigerian Institution of Estate Surveyors and Valuers (NIESV).

I am the principal consultant of Aakient Consultants Ltd, a highly progressive and consolidated property and construction project management company, which is committed to providing the highest level of professionalism and services in meeting clients’ real estate needs.

Feel free to contact me at: aakientconsultants@gmail.com