Residential Property Investment and Its Associated Problems (A Case Study of Amorites Estate, Osogbo)
Chapter One
AIMS AND OBJECTIVE
This study aims at analyzing and examining the residential property investment in Osun state and its associated problems using Amorite Estate Osogbo as a case study.
In order to achieve the aim, the following objectives shall be adopted.
- To examine various means of satisfying additional housing investment in the state.
- To determine the viability of residential property investment and realization of the target income.
- To identify those risks (problems) involves in residential property investment as well as proffering solution and recommendation to the problems identified.
CHAPTER TWO
LITERATURE REVIEW
INVESTMENT
An investment is laying down capital or committing capital in anticipation for returns that is higher.
Investment involves making a current commitment of fund in order to obtain an uncertain future returns, it is a risky business that demands information on how the risky thereof can be solve in order not to have (risk) impact on the capital and income and also to ensure there is adequate security for capital and income. In property development particularly, the amount of capital needed is often great, the time taken before the new buildings can begin its existence is very long.
For many people, the purpose of a residence is the biggest they make in their entire lives.
The goal of an investor in investment is to maximize their rate of return or equivalent the terminal value of their investment.
The period of time between the purchase and sale data of an investment horizon, or holding period is very long in nature, if this period is short, the position may not be a legitimate investment it may be a gamble or a speculation, but due to its long period in nature it is a legitimate or usual investment. An investment in real estate might yield two types of income:
Net/Rental income: which is the actual income after all expenses and been deducted and
Price appreciation (or depreciation): known as capital gain
QUALITIES OF AN INVESTMENT
The qualities of a good investment is as follows:
- Security of capital
- Durability
- collateral for loan
- security of income
SECURITY OF CAPITAL
This is the most important features prospective investors should focus before placing their money in an investment. An investor and investment manager should ensure there is strong probability of recouping the capital at anytime need arises.
DURABILITY
This kinds (residential property) investment lasts for many years with a very slow rate of deterioration (coupled with management efficiency), even when the property is old and the rate of deterioration has quickened, the land will continue to increase, because of the durable nature of the land.
CHAPTER THREE
RESEARCH METHODOLOGY
Various methods of data collection sources of such data could be discussed in this chapter. Methods of data presentation and analysis shall equally be examined in this chapter.
TARGET POPULATION AND STUDY AREA
A population is the totality, summation or aggregates of all case, which pass a set of well defined characteristics, or which confirms to some designated set of specification. The study area of the research work is the Amorite Housing Estate, Osogbo, Osun State.
SAMPLING FRAME
The study laid emphasis on the Amorite Estate Osogbo as the study area. This sampling frame is necessary because it is the appropriate means through which the target population can be effectively studied.
Based on the record of the management of Amorite Estate Osogbo Osun State, all the necessary information were gathered.
CHAPTER FOUR
INTRODUCTION
This chapter shall deal with the presentation and analysis of data collected for this research work.
The number of those that responded to the questionnaire were thirty people. In order to realize the aim of research work, which is to examining the residential property investment and its associated problems in Osun State.
CHAPTER FIVE
INTRODUCTION
This chapter shall contain summary of findings, recommendation and conclusion of this research work.
SUMMARY OF FINDINGS
This dissertation has to do basically with residential property investment and other types of investment on landed properties, including various returns on different kinds of investment in stock market and landed property investment.
Also, various sources of financing property investment on land were examined in this research work.
From the reactions of the respondents, it was discovered that there still increase in the growth of the population in Osun State, and this has led to assertion that more housing unit should be provided for the people. Also that the influx of the people into the state has both positive and negative effect on the property market, because tenants are complaining about the arbitrary increase in rent, while developers are being favoured.
The study equally shows that short of fund and land problem constitute serious problem to residential housing investment.
In addition, the study reveals that the available residential accommodation can not meet up with the present population in the state.
Furthermore, it was discovered that the prospect of realizing profit from residential housing investment over the time is guaranteed as there are interested buyers and prospective tenants of real estate.
This research work also examine ways, in which people who prefer to invest in stock exchange market can get fund to finance their investment in order to ensure regular cash flows of income in the society.
Finally, as this study was based on residential property investment and its associated problems, various problems (like structural flow, liquidity etc.) had been identified for the sake of up-coming investors to make specification of those identified problems in order not to run into the same problems as their predecessor.
IMPLICATION OF FINDINGS
The main implication of this research work is to expose various investors or developers of landed property or real estate investment. Particularly, residential property to various sources of financing their project so as to increase the number of housing unit in order to eliminate housing unit scarcity.
RECOMMENDATIONS
From the peoples, so questioned through the questionnaire, various responses were received to all the question and based on their response and findings the following recommendations were made:
Government should acquire land through the power of compulsory acquisition and build houses for the citizenry to leave or buy, so as to reduce the problems of land tenure system in which individual could be duped.
Government should also encourage the individual to save at higher interest rate and also borrow at low interest rate to build their houses at any given time now or in the future.
Government should introduce appropriate fiscal measure to protect the assets and liabilities of individual.
Government should continue to make budgetary allocation to the housing sector to finance low income housing schemes.
Government should make sure that people should build on simple, imaginative and functional designers, and space standard to facilitate cost reduction, affordability and acceptability.
Finally government should also encourage the development of appropriate technology to facilitate production and use of local building materials.
CONCLUSION
From all the foregoing it had been stated in the presentation and analysis of data collected that what is good for some people are bad for other which is in line with the maxim “one mans food is another mans poison”. This assertion has to do with the influx of the people into the state capital and its impact on property market, some people are favoured about the influx, especially the landlords, while some people (the tenants) are not favoured about the influx because they bear all the burdens.
This dissertation also examined rent as a return on the use of the property or improvement on land and different type of rent(s), where it can be collected and applied are also discovered.
REFERENCES
- Chika E. Udechwkwu (2010), Introduction to Estate Management, Nigeria.
- Kuye Olusegun (2003), Principle and Practice of Property valuation “Volume Two” Lagos Nigeria.
- Micheal Thorn croft (1965), Principle of Estate Management, The Estate Gazette Limited London.
- Mulib Ibikunle Lawal (2000), Estate Development Practice in Nigeria.
- Rogger C. Ibboston & Cary P. Brinston – Investment Market
- Jark Clark fracis – Management of Investment.
- Web site 2010 – www.google.com
