CHAPTER ONE: INTRODUCTION

1.1 BACKGROUND OF THE STUDY

Residential property investment is emerging as a managerial science today (Kyle and Baird,

2002). It transcends beyond the role of rent collector (Li, 2003). Managing a residential property

involves establishing goals, objectives and policies and implementation of strategies to achieve

those goals and objectives. Singh (2004) posited that residential property investment is an

activity that seeks to control interests in property owner and particular purpose for which the

property is being held. Barlowe (2005) considers residential property investment as the work

carried out to manage and maintain the development including its facilities at the level that will

retain or enhance the value of the residential property, create a safe, functional and conducive

living environment for occupants, keep or restore every facility in efficient working order and in

good state of repair, and project a good appearance or image for the development. Ismail (2001)

regards residential property investment responsibility as including all the necessary making to

ensure the economic and physical vitality of residential property assets.

Residential property investment is also the investment of personal property, equipment, tooling

and physical capital assets that are acquired and used to build, repair and maintain the residential

property. Property investment involves the processes, systems and manpower required to manage

the life cycle of all public residential property as defined above including acquisition, control,

accountability, responsibility, maintenance, utilization and disposition (Njoku, 2006). According

to Ebie (2001), duties involved in residential property investment generally will include a

minimum of these basic primary tasksThe full and proper screening or testing of an

tenants/applicant’s credit, criminal history, rental history and ability to pay. Lease contracting or

accepting rent using legal documents approved for the area in which the property is located.

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Mitigation and remediation regarding any maintenance issues, generally within a budget, with

prior or conveyed consent via a Limited Power of Attorney legally agreed to by the property

owner.

There are many facets to this residential property investment, including managing the accounts

and finances of the real estate/residential properties, and participating in or initiating litigation

with tenants, contractors and insurance agencies. Litigation is at times considered a separate

function, set aside for trained attorneys. Although a person was responsible for this in his/her job

description, there may be an attorney working under a property manager. Special attention is

given to landlord/tenant law and most commonly evictions, non-payment, harassment, reduction

of pre-arranged services, and public nuisance are legal subjects that gain the most amount of

attention from residential property managers. Therefore, it is a necessity that a public residential

property manager be current with applicable municipal, county, state and Federal Fair Housing

laws and practices. In advanced countries, residential property investment, like facility

investment, is increasingly facilitated by computer-aided facility investment (CAFM).

Landed property ownership is regarded as a great success and achievement; and this mentality

has great influence on landed property itself. After the construction of buildings, most property

owners tend not to care for it again as all that matters to them is that they have a property which

they can call their own. This is because most Nigerians lack maintenance culture. However, the

effective investment of properties is very important, due to its nature and the capital involved in

its construction. Properly managed properties will not only maximize the income realized from

the property where the property is built for investment purpose, but will also ensure that the

property is in a good physical and structural state for it to continue performing the purpose for

which it was built.

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However, managers of residential properties in Nigeria are faced with various kinds of problems

ranging from uncooperative attitude from workers, poor maintenance and environmental

condition, security and other basic infrastructures. Some managers in Nigeria have been able to

cope with some of these challenges but the researcher will provide an overview about the

problem and prospects of residential properties investment focusing on Birnin Kebbi Township.

1.2 STATEMENT OF THE RESEARCH PROBLEM

According to Bello (2008), residential property is more than a mere shelter; it includes all

facilities within and around it, embracing a bundle of services this entails both product and

process. Investment of residential building embraces in all ramifications the maintenance and

development process, be it economic, social, and physical). In fact, investment of these

properties has been subject of focus by researcher in recent times based on the cumbersome

nature of the process.

Multi-tenanted low-income residential properties impose a lot of problems in its investment.

There is a great struggle to meet up with the investment objectives, the cost of preserving the

building and satisfying the tenants. The problem of poor investment of residential properties is a

global phenomenon and the severity of the problem differs from one nation to another.

One of the problem observe is that due to the recent drop in the prices of crude oil world wide

and corruption, government has not been able to invest in real estate. Overpopulation and

urbanization has led to massive increase in property development. Financial houses readily

obliged developers’ loans, as they perceived minimum risks. Since real estate development

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requires huge capital outlay, there is always the need for real estate developer to source for fund

(Ebre, 2001).

Another problem observe in the study area is that in recent times, research on real estate

investment has been on the front burner has it is the major source of housing for man. In the

hierarchy of man’s needs, housing has been ranked second and as a result of this; housing

provision has become a paramount cornerstone of the policies of various governments both at

federal and state levels since independence in Nigeria (Colli, 2014)

However, the researcher is seeking to examine the problems and prospects of investment of

residential property in Birnin Kebbi Township.

1.3 RESEARCH QUESTIONS

i. What are the types of residential property investment in the study area?
ii. What are the problems of residential properties investment in Birnin Kebbi Township?
iii. What are the prospects of residential properties investment in Birnin Kebbi Township?
iv. What is the solution to the problems of residential properties investment in Birnin Kebbi
Township?
1.4 AIM OF THE STUDY

The aim of the study is to examine the problems and prospects of residential property investment

in Birnin Kebbi Township.

1.5 OBJECTIVES OF THE STUDY

The following are the objectives of this study:

i. To identify types of residential property investment in the study area

ii. To examine the problems of residential properties investment in Birnin Kebbi Township.

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 iii. To analyze the prospects of residential properties investment in Birnin Kebbi Township.
iv. To identify the solution to the problems of residential properties investment in Birnin
Kebbi Township.
1.6 SIGNIFICANCE OF THE STUDY

The property investment and maintenance policies if any seem to be ineffective, as the

government have failed in their primary assignment of solving the perennial housing problems.

This work was carried out with the aim that its outcome was of great value to several interest

groups: the academia, investors and government at all levels.

The outcome of this study will educate the general public on the problems and prospects of

managing residential properties in Nigeria emphasizing on its proper investment and some other

investment challenges which will form a guide for estate managers in decision making.

It will equally benefit the investors; hence the research will provide a good insight into the

viability or otherwise of residential property investments in Kaduna metropolis. This research

will also serve as a resource base to other scholars and researchers interested in carrying out

further research in this field subsequently, if applied will go to an extent to provide new

explanation to the topic.

1.7 SCOPE OF THE STUDY

The scope of this study on the problems and prospects of residential properties investment in

Birnin Kebbi Township will cover all the basic problems faced by managers in effective

maintenance of both the infrastructure and finances generated on residential property.

1.8 OUTLINED METHODOLOGY

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1.8.1 Primary Data: these are data collected by the researcher for specific purposes. Relevant

information was gathered directly from the subject of inquiry through interviews, questionnaires,

and observation methods. These are, however, raw data that was gotten from the place of study

to which statistical inferences can be made possible for this work.

1.8.2 Secondary Data: these are data collected for a purpose other than the one of which it was

collected originally. They are data extracted from already published materials, e.g. Journals,

magazines, and Textbooks etc.

1.8.3 Target Population: the targeted population are the Estate Surveyor and Valuers and

property developers in the study area.

1.8.4 Research Instrument: Questionnaires shall be used.

1.8.5 Data Analysis: The method of data analysis for this project was frequency table, simple

percentage and likert scale. The sample techniques that was used in this research work was

stratified and purposive sampling techniques. And at the end of the research work, table was use

to interpret and analyse data collected.

1.8.6 Sampling Size: the sample size is a term used in market research for defining the number

of subjects included in a sample size. By sample size, we understand a group of subjects from the

general population and are considered a representative of the real population for that specific

study.

1.9 DEFINITION OF TERMS

Investment: An investment is an asset or item acquired with the goal of generating income or

appreciation. Appreciation refers to an increase in the value of an asset over time. When an

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individual purchases a good as an investment, the intent is not to consume the good but rather to

use it in the future to create wealth.

Property: Property is any item that a person or a business has legal title over. Property can be

tangible items, such as houses, cars, or appliances, or it can refer to intangible items that carry

the promise of future worth, such as stock and bond certificates. It can also be define as anything,

tangible or intangible whereby legal relationship exists between a person and the State enforces a

possessory interest or legal title in that thing (Famuyiwa, 2012).

Residential Property: Residential property is property zoned specifically for living or dwelling

for individuals or households; it may include standalone single-family dwellings to large, multi-

unit apartment buildings. The classes of dwelling units which provide shelter. It is also the

building used substantially as living accommodation.

Prospects: The possibility or likelihood of some future event occurring also prospect is an

individual organization that fits a seller criteria to be a potential customer.

Real property: is a parcel of land and everything that is permanently attached to the land. The

owner of real property has all of the rights of ownership, including the right to possess, sell,

lease, and enjoy the land.

1.10 OVERVIEW OF THE STUDY AREA

Historical Background of Birnin Kebbi

Historically, Birnin Kebbi the administrative headquarter of Kebbi State is one of the oldest

settlements in the state, believed to have been established by the Kabawa ethnic group many

years ago. It became a principal and major commercial centre when it became the headquarters

of the famous Kabawa Dynasty. The rise of Kebbi is indeed closely associated with the rise of

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Kanta in the sixteenth century. According to an account, Kanta conquered and ruled places

including Katsina, Kano, Gobir, Zazzau and half of the land of Songhai. Kanta established his

capital at Surname. A succession dispute which arose over the appointment of the Sarkin Kabi

Tomo dan Ibrahim (1712 - 1716), however, occasioned a mass Kabawa withdrawal from

Surname and its abandonment as the capital of the kingdom.

After the fall of Surname, the capital of Kabi eventually moved to Birnin Kebbi but first settled

at Takalaffia. This new status was until the emergence of the 18th century Fulani jihad led by the

great Islamic scholar Shehu Usman Ibn Fodio. In 1805, the Fulani under Abdullahi Ibn Fodio

made victorious progress towards Birnin Kebbi and captured it under the reign of Muhammdu

Hodi. Consequently, Birnin Kebbi was taken over by the Fulani’s, who already had established a

jurisdiction at Gwandu for the control and protection of the conquered western territories, under

the leadership of Abdullahi Ibn Fodio.

Birnin Kebbi (see figure ii) became a major power in the region, resisting Songhai attacks and

expanding into the Yauri and Nupe lands to the south. During the Fulani jihad of the 1803,

Abdullahi Dan fodio (1766 - 1828) the younger brother to Shehu Usman Dan fodio defeated the

forces of Kebbi and became ruler of the Gwandu Emirate which dominates the north-east of the

Sokoto (Sakkwato) caliphate.

Geographical Location:

Birnin Kebbi is a city located in the north-western Nigeria, along Latitude 12.4539 0, Longitude

4.19750. It is the administrative headquarters of Kebbi state, and was carved out of Sokoto state in

August 1991 by the then military administration of General Ibrahim Babangida.

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It is located on the Sokoto River and is connected by road to Argungu (45km Northwest), Jega

(35 km South East and Bunza (45 km Southwest).

Population:

It has a total population of 275,547 as projected by the 2006 census within the eight (8) district

areas; these areas are: Birnin Kebbi, Ambursa, Gwadangaji, Zauro, Gulumbe, Kardi, Makera and

Kola. The town is predominantly hausa and Fulani, but are characterised by a few non-indigenes.

Climatic Condition

Birnin Kebbi has a climatic condition of the Sudan and Sahel savannah and a tropical region with

an average temperature of 32o Celsius. It is also characterised by seasonal rainfall which usually

commence in April and last to October, though with heavy fall in July and August. The

vegetation of the area is always predominantly sparsely trees like the name tree (Dogonyaro) and

few grasses. The extreme hamattan period is usually accompanied by dust and fog and this

prevails more between November and January.

The town Birnin Kebbi is characterised by areas which make up the metropolis. However, only

three of these areas was examined in this work. The areas to be studied are: Badariya, Gesse and

Bayankara.

Birnin Kebbi is a new state and is growing at a steady pace; however, the growth is not in line

with the planning regulations. Most houses are built without planning permission. If this is

allowed to continue, the town will face some development problems in the nearest future.

Economic Activities of the People

The pivot economic activities in Kebbi State generally revolved round Agriculture as the state is

blessed with arable fertile land. The major food crops in rainy season are millet, wheat, guinea

corn, the cash crops are cotton, ginger, sugar cane, and onion which recently tremendous

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awareness and involvement in dry season farming in the state to the extent that now Kebbi State

is the largest producer of onion in the country.

Figure 1: Map of Kebbi State in Federal Republic of Nigeria.

Source: Ministry of Lands, 2022.

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Figure 2: Map of Birnin Kebbi in Kebbi State.

Source: Ministry of Lands, 2022

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 CHAPTER TWO : LITERATURE REVIEW

2.1 Introduction

Drawing from the importance of carrying out a systematic process that identifies the existing

body of knowledge in a subject area under analysis (Collis and Hussey, 2014), there is a need to

discuss theory that relate to the area of study as well as critically analyze previous research that

focus on factors influencing the residential Investment system in the Nigerian context. Thus, this

chapter has two sections: The first section focuses on the relevant theory and the application to

the residential Investment, while the second section focuses on the residential market review,

making use of existing scholarly contributions from previous studies. These sections serve the

purpose of creating a firm theoretical basis drawn from previous researches which are relevant to

the phenomena of study. Thus, this section will serve as a contextual framework for the research

and will identify gaps and deficiencies in existing knowledge which was addressed in the

research.

2.1 Concept of Residential Property Investment

An investment property is real estate property purchased with the intention of earning a return on

the investment either through rental income, the future resale of the property, or both. The

property may be held by an individual investor, a group of investors, or a corporation. An

investment property can be a long-term endeavor or a short-term investment. With the latter,

investors will often engage in flipping, where real estate is bought, remodeled or renovated, and

sold at a profit within a short time frame Barlowe (2005). The term "investment property" may

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also be used to describe other assets an investor purchases for the sake of future appreciation

such as art, securities, land, or other collectibles.

Investment properties are those that are not used as a primary residence. They generate some

form of income—dividends, interest, rents, or even royalties—that fall outside the scope of the

property owner's regular line of business. And the way in which an investment property is used

has a significant impact on its value (Li, 2003). Investors sometimes conduct studies to

determine the best, and most profitable, use of a property. This is often referred to as the

property's highest and best use. For example, if an investment property is zoned for both

commercial and residential use, the investor weighs the pros and cons of both until they ascertain

which has the highest potential rate of return. They then utilize the property in that manner.

An investment property is often referred to as a second home. But the two don't necessarily mean

the same thing. For instance, a family may purchase a cottage or other vacation property to use

themselves, or someone with a primary home in the city may purchase a second property in the

country as a retreat for weekends. In these cases, the second property is for personal use—not as

an income property.

2.2.1 PROBLEM OF RESIDENTIAL PROPERTY INVESTMENT

According to Jean (2003) the problem associated with residential property investment include;

1. Choosing a Bad Location

Location should always be your first consideration when buying an investment property. After

all, you can’t move a house to a more desirable neighborhood—nor can you move a retail

building out of an abandoned strip mall.

Location ultimately drives the factors that determine your ability to make a profit—the demand

for rental properties, types of properties that are in the highest demand, tenant pool, rental rates,

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and the potential for appreciation. In general, the best location is the one that will generate the

highest return on investment (ROI). However, you have to do some research to find the best

locations

Negative Cash Flows

Cash flows on a real estate investment refer to the money that’s left over after paying all

expenses, taxes, insurance, and mortgage payments. Negative cash flows happen when the

money coming in is less than the money going out—meaning that you’re losing money.

Some common reasons for negative cash flows include:

i. High vacancy rate

ii. Too costly maintenance

iii. High financing costs on loans

iv. Not charging enough rent

v. Not using the best rental strategy

2. Negative Cash Flows

Cash flows on a real estate investment refer to the money that’s left over after paying all

expenses, taxes, insurance, and mortgage payments. Negative cash flows happen when the

money coming in is less than the money going out—meaning that you’re losing money.

Some common reasons for negative cash flows include:

i. High vacancy rates

ii. Too costly maintenance

iii. High financing costs on loans

iv. Not charging enough rent

v. Not using the best rental strategy

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The best way to reduce the risk of negative cash flow is to do your homework before buying.

Take the time to accurately (and realistically) calculate your anticipated income and expenses—

and do your due diligence to make sure that the property is in a good location. .

3. High Vacancy Rates

Whether you own a single-family house or an office building, you need to fill those units with

tenants to generate rental income. Unfortunately, there’s always the risk of a high vacancy rate in

real estate investing. High vacancies are especially risky if you count on rental income to pay for

the property’s mortgage, insurance, property taxes, maintenance, and the like.

4. Problem Tenants

To avoid vacancy risk, you want to keep your investment properties filled with tenants. But that

can create another risk: problem tenants. A bad tenant can end up being more of a financial drain

(and a headache) than having no tenant at all. Common problems with tenants include those who:

i. Don’t pay on time—or don’t pay at all (which could lead to a lengthy/costly eviction

process)

ii. Trash the property

iii. Don’t report maintenance issues until it’s too late

iv. Host extra roommates (humans or animals)

v. Ignore their tenant responsibilities

While it’s impossible to eliminate the risk of having a problem tenant, you can protect yourself

by implementing a thorough tenant screening process. Be sure to run a credit check and criminal

background check on every applicant. Also, contact each applicant’s previous landlords to look

for red flags like late payments, property damage, and evictions.

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It’s also recommended that you investigate a potential tenant’s work history. Make sure they

have a steady salary that can reasonably cover rent and living expenses. It’s also a good idea to

pay attention to scattered work history. An applicant who bounces from job to job may have

trouble paying the rent and may be more likely to relocate in the middle of a lease.

5. Lack of Liquidity

If you own stocks, it’s easy to sell them if you need money or just want to cash out. That’s not

usually the case with real estate investments. Because of the lack of liquidity, you could end up

selling below market or at a loss if you need to unload your property quickly. While there’s not

much you can do to lower this risk, there are ways to tap into your property’s equity if you need

cash. For example, you can take out a home equity loan (for residential rental properties), do a

cash-out-refinance—or, for commercial properties, take out a commercial equity loan or equity

line of credit.

2.3 PROSPECTS OF RESIDENTIAL PROPERTIES INVESTMENT

According to Brown (2013) the following are the various prospect of residential property

investment:

1. Property Location

The adage "location, location, location" is still king and continues to be the most important factor

for profitability in real estate investing. Proximity to amenities, green space, scenic views, and

the neighborhood's status factor prominently into residential property valuations. Closeness to

markets, warehouses, transport hubs, freeways, and tax-exempt areas play an important role in

commercial property valuations.

One way to collect information about what are the prospects of the vicinity of the property you

are considering is to contact town hall or other public agencies in charge of zoning and urban

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planning. This will give you access to the long-term area planning and make a determination

how favorable or unfavorable to your own plan for the property.

2. Investment Purpose and Investment Horizon

Given the low liquidity and high-value investment in real estate, a lack of clarity on purpose may

lead to unexpected results, including financial distress—especially if the investment is

mortgaged. Identify which of the following broad categories suits your purpose, and then plan

accordingly:

i. Buy and self-use: Here you will save on rent and have the benefit of self utilization,

while also getting value appreciation.

ii. Buy and lease: This offers regular income and long-term value appreciation. However,

the temperament to be a landlord is needed to handle possible disputes and legal issues,

manage tenants, repair work, etc.

iii. Buy and sell (short-term): This is generally for quick, small to medium profit—the

typical property is under construction and sold at a profit on completion.

iv. Buy and sell (long-term): This is generally focused on large intrinsic value appreciation

over a long period. This offers alternatives to compliment long-term goals, such as

retirement.

3. Cash Flows and Profit Opportunities

Cash flow refers to how much money is left after expenses. Positive cash flow is key to a good

rate of return on an investment property. Develop projections for the following modes of profit

and expenses:

i. Expected cash flow from rental income (inflation favors landlords for rental income)

ii. Expected increase in intrinsic value due to long-term price appreciation.

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 iii. Benefit of depreciation (and available tax benefits)

iv. Cost-benefit analysis of renovation before sale to get a better price

v. Cost-benefit analysis of mortgaged loans vs. value appreciation

4. Indirect Investments in Real Estate

Managing physical properties over a long-term horizon is not for everyone. Alternatives exist

that allow you to invest in the real estate sector indirectly.

Consider other ways to invest in real estate:

i. Real estate investment trusts (REITs)

ii. Real estate company stocks

iii. Real estate sector-focused mutual funds and ETFs

iv. Mortgage bonds

v. Mortgage-backed securities (MBS)

5. New Construction vs. Existing Property

New construction usually offers attractive pricing, the option to customize, and modern

amenities. Risks include delays, increased costs, and the unknowns of a newly-developed

neighborhood. Existing properties offer convenience, faster access, established improvements

(utilities, landscaping, etc.), and in many cases, lower costs.

Here are some key things to look for when deciding between a new construction or an existing

property:

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 i. Review past projects and research the construction company's reputation for new

investments.

ii. Review property deeds, recent surveys, and appraisal reports for existing properties.

iii. Consider monthly maintenance costs, outstanding dues, and taxes. Costs such as these

can severely impact your cash flow.

iv. When investing in leased property, find out if the property is rent-controlled, rent-

stabilized, or free market. Is the lease about to expire? Are renewal options favorable to

the tenant? Who owns the furnishings?

v. Quality-check items (furniture, fixtures, and equipment) if these are to be included in the

sale.

2.4 PROPERTY INVESTMENT: Investment can be regarded as an act of laying down or

surrendering the present capital with the expectation of reaping the benefit in future in the form

of returns which habitually takes the form of an income flow and capital increase (Payne, 2014).

They further argued that property investment is based on the capital investigation of expected

advantages and dangers, with the desire of acknowledging benefits, either instantly or all the

more frequently over a broadened period. The future profit could be money related returns or

expanded yield.

Real property investments are also known as a real investment as they have the potential of

yielding returns to investors. In line with this research study, residential property investment

refers to the buildings that are strictly for dwelling purposes and which are meant to generate

income (returns) either from capital gain or rental income. However, a rational investor is

expected to minimise risk to maximise returns from his investment. To ascertain the level of

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return from an investment, there is a need to appraise comparatively the return from the subject

investment with alternative investments, understanding its nature outlets, strength and weakness.

Furthermore, Ajayi (2014) provided critical analysis of the qualities of a good investment, which

any potential investor must consider before investing his money on any kind of investment, and

this includes; capital invested must be secured, safe return from the investment must be able to

recoup the capital in good and reasonable term, liquidity, capital must be seen to be appreciable,

hedge against inflation, management and maintenance should be easy, investment should be

affordable. According to him, all the above-listed qualities must be critically analysed before an

investor can make up his mind to commit his capital on any form of investment outlets opened to

him. As outlined by Hoesli & Mcgregor (2000), the investment market is better understood when

investment fundamentals and characteristics of the principal types of investment are identified.

2.4.1 TYPES OF REAL ESTATE INVESTMENT

There are several types of real estate investments, but most fall into two categories: Physical real

estate investments like land, residential and commercial properties, and other modes of investing

that don’t require owning physical property, such as REITs and crowdfunding platforms.

Investing in traditional, physical real estate can offer a high return, but it also requires more

money upfront and it can have high ongoing costs. REITs and crowdfunding platforms have a

lower financial barrier to entry, meaning you can invest in multiple types of real estate for far

less than it would cost to invest in even one traditional property. These alternative real estate

investments also offer the distinct advantage of not having to leave your house or put on pants to

start investing.

1. REITs

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Publicly traded REITs, or real estate investment trusts, are companies that own commercial real

estate (think hotels, offices and malls). You can invest in shares of these companies on a stock

exchange. By investing in REITs, you are investing in the real estate these companies own,

without as many of the risks associated with owning real estate directly.

REITs are required to return at least 90% of their taxable income to shareholders every year.

This means investors can receive attractive dividends in addition to diversifying their portfolios

with real estate. Publicly traded REITs also offer more liquidity than other real estate

investments: If you find yourself suddenly needing some cash, you can sell your shares on the

stock exchange. If you want to invest in publicly traded REITs, you can do so through a

brokerage account.

2. Crowdfunding platforms

Real estate crowdfunding platforms offer investors access to real estate investments that may

bring high returns but also carry significant risk

3. Residential Real Estate

Residential real estate is virtually anywhere that people live or stay, such as single-family homes,

condos and vacation homes. Residential real estate investors make money by collecting rent (or

regular payments for short-term rentals) from property tenants, through the appreciated value

their property accrues between when they buy it and when they sell it, or both. Investing in

residential real estate can take many forms. It can be as simple as renting out a spare room or as

complicated as buying and flipping a house for a profit.

4. Commercial Real Estate

Commercial real estate is a space that is rented or leased by a business. An office building rented

by a single business, a gas station, a strip mall with several unique businesses and leased

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restaurants are all examples of commercial real estate. Unless the business owns the property

itself, each business would pay rent to the property owner.

Industrial and retail real estate can fall under the commercial umbrella. Industrial real estate

generally refers to properties where products are made or housed rather than sold, like

warehouses and factories. Retail space is where a customer can buy a product or service, like a

clothing store. Commercial properties tend to have longer leases and can command more rent

than residential properties, which may mean greater and steadier long-term income for a property

owner. But they may also require higher down payments and property management expenses.

5 Raw land

Investors typically buy land for either commercial or residential development. But buying land

to develop involves a fair amount of market research, especially if you plan to develop the

property yourself. This type of investment is best suited to someone with a large amount of

capital to invest and a deep knowledge of all things real estate —building codes, zoning

regulations, flood plains — in addition to an understanding of the local residential and

commercial rental markets.

2.5 RESIDENTIAL INVESTMENT RESEARCH

Research in residential Investment has experienced massive development in recent years.

However, Wapwera et al (2011) observe that there is a higher volume of literature in this

research area in mature economies, than emerging economies.

Furthermore, Kim and Cho (2014) suggest that previous research can broadly be classified under

comparative studies, case studies of specific countries, and a combination of the two. Thus,

focusing on Nigeria, which is an emerging economy was identical to the convention of previous

country-specific studies and will also be a valuable contribution to the subject area in emerging

22
economies. Based on the foregoing, it is important to review residential Investment in the context

of relevant theoretical framework and past research.

2.6THEORETICAL FRAMEWORK

2.6.1 RESIDENTIAL THEORETICAL REVIEW

Residential Investment, which involves a transfer of real property to the mortgagee (lender),

involves the advancement of mortgage loans to potential homeowners at an agreed repayment

schedule (Ladd, 1998). Furthermore, Kioko (2014), who bases his proposition on previous

studies (Medley 2011), suggests that the Lien, title and intermediate theory tend to distinguish

rights, obligations and possession between lender and borrower. The Lien Theory: This theory

suggest that the mortgagee transfers ownership of the property to the mortgagor, while the

mortgagee retains security, equity and legal title during the mortgage period. Kioko (2014)

evokes support from DiPasqule and Wheaton (1992) that this creates lien on land which protects

the mortgagee, because the mortgagee is entitled to legal repossession of the mortgaged property

in the case that the mortgagor is not able to meet the repayment obligations. Medley (2011) also

reiterates that the agreement of the mortgagor to make installment payments during the mortgage

repayment period creates a basis for the mortgagor to have possession of the title, while the

mortgagee retains the deed to the property.

The Title Theory: This theory suggests that the mortgagee holds the legal title while the

mortgagor, despite being recognized as the owner of the property only possesses the equity title

until the mortgage is fully paid up (DiPasqule and Wheaton, 2003). This makes the property a

collateral during the mortgage period and the mortgagee delivers the deed to the mortgagor upon

satisfaction of the loan obligation. Medley (2011) adds that according to this theory, mortgage

23
loans are considered as conveyance of the equity title to the mortgagor and that in the case that

the mortgagor is not able to meet the repayment conditions, the mortgagee has the right to

repossess the property.

The intermediate Theory: This theory combines the lien and title theories. Medlye (2011)

suggests that the lien theory is applied, unless the mortgagor fails to meet the repayment

conditions, which will cause the title to be held by the mortgagee until the mortgage loan is

repaid in full. Furthermore, the intermediate theory prevents the mortgagor from selling the

property until the mortgage is fully paid for, creating a protective hedge for the mortgagee.

Kioko (2014) further emphasizes that not-withstanding the fact that a debt exists, the mortgagor

has the right to ownership of the property, while the mortgagee has the right of security to the

property.

2.7 LIFE-CYCLE THEORY AND RESIDENTIAL INVESTMENT

Several scholars have suggested that a relationship exists between household decisions,

residential Investment and the life-cycle theory. This has led to the development prospective

earnings from work. Thus the assumption that household in this model will engage in borrowing

and lending which will even out the rate of consumption over the period of their lifetime.

Modigliani and Brumberg (1954) elaborate upon this concept and develop what has become the

“Life Cycle Theory of Saving and Consumption”. The theory suggests that an individual’s

current rate of consumption and savings can be explained more in terms of the individual’s

current position in the life-cycle which is of various life-cycle models for household residential

Investment decisions. The study of Fisher (1936) forms the basis of the life-cycle theory. It

suggests that a household’s consumable resources are measured by the household’s wealth,

which is defined as the sum of its non-human wealth, net liabilities and the present value of its

24
described mainly by the individual’s age in the life-cycle, with less emphasis on the individual’s

current rate of income. The study implies that middle aged individuals (25- 60 years old) often

spend more on residential than younger people (less than 25 years old) and older people (over 60

years old). Yaari (1965) further provides what appears to be a more appropriate basis for the

allocation of an individual’s consumption over his or her lifetime in the form of a utility

function, with well-defined properties, to be maximized subject solely to wealth constraint. He

further proves that under these assumptions, the optimal plan of consumption over the life-cycle

is a continuous function of time. This study is unique because it introduces the factor of

‘uncertainty’, on the proposition that a person’s life-cycle is uncertain based on the fact that no

one knows for sure how long he/she will live. Another element of uncertainty which is briefly

considered is the uncertainty of future household income. The Euler equation derived by Hall

(1978) cited in Hall (1987) suggests that an individual’s consumption is not be predictable

because income is also not predictable. Thus, another spectrum of ‘uncertainty’ may be

considered especially when studying countries typically characterized by volatile national

economies. More recent studies have attempted to create a link between the life-cycle theory,

household residential decisions, household wealth and debt levels as well as homeownership

performance by designing models to test the theory based on varying assumptions. For instance,

the model of Mariger (1987) is based on intertemporal assumptions that by deferring current

consumption, future wealth levels may increase or decrease significantly. This implies that as a

person advances in age, and as residential repayment increases, the middle-aged person

decreases in residential debt and increases in equity, thus making a transition from debt to

wealth. Like previous studies, this emphasizes the role of age in household residential decisions.

However, it stands out by also investigating the effect of current household decision and

25
characteristics such as family size, level of education of household head, and composition on

their future debt and wealth positions. The model of Megboluge and Linneman (1993) attempts

to measure homeownership performance using similar variables in previous studies. While

suggesting that over the life-cycle, residential have provided a means to accumulate savings in

real property, the study suggests that homeownership is influenced by household’s preferences,

income, wealth and relative costs of owning and renting houses. Additionally, it suggests that

strong relationship exists between homeownership propensity and socio-economic characteristics

which forms the basis for the model of the life-cycle effect on household consumption decisions.

In line with previous conventions established in Mariger (1987), age-tenure relationship and

family structure effects are established. Thus, the model is built on age, household

characteristics, house prices, macroeconomic factors, transaction cost, utility, investment,

affordability, among others. Tin (2000) further instigates the life-cycle theory in line with

propensity to save and demand for financial

assets. The study reveals that changes in socio-demographic conditions have significant impacts

on the saving behavior of individuals in the financial markets. The model of Tin (2000) which is

based on Meghir and Weber (1996) and Hall and Miskin (1982) produce results that are in

tandem with previous studies- that the consumption and savings behavior of an individual

changes significantly with income, wealth, age, marital status, household structure and other

socio-economic conditions during various stages in the life-cycle. This further emphasizes the

proposition of the life-cycle theory that major differences exist in the consumption and saving

behavior of heterogeneous individuals. Campbell and Cocco (2003) on the other hand focus on

choice between a fixed-rate residential (FRM) and an adjustable-rate residential (ARM). This is

26
an important area of consideration, especially in developing economies which are often

characterized by uncertainty. This often leads to macroeconomic volatility which is typically

characterised by fluctuating inflation and interest rates. The variability in inflation rate often

leads to increase in real capital value for a nominal FRM while an ARM has a stable real capital

value. In these conditions, the ARM create households’ borrowing constraints, because of their

inability to cope with fluctuations in the interest rates and Increase in inflation changes. It can

thus be concluded that the form of residential contract can have significant effects on household

welfare and by effect, residential decisions.

In another perspective, the study of Dretrich and Johannsson (2005) reveals that the level of

competition in the market which is determined by the number of financial institutions often

causes financial institutions to discriminate based on conditions that are dependent on the life-

cycle. As a result of this, age is often used as a risk management condition and often evoked as a

means of obtaining risk premium for younger householders and first-time buyers. Li and Yao

(2007) further reveal that house price appreciation generally increases the net-worth and

consumption of homeowners. While it only improves the equity position and welfare of old

homeowners, it negatively impacts renters and first-time buyers (usually younger householders),

resulting from higher life-time housing consumption cost which increases repayment cost and

time. Li and Yao (2007) also develop a life-cycle model that explicitly incorporates the dual

feature of housing as both consumption good and an investment asset. The analysis indicates that

the consumption and welfare consequences of house price changes on individual households

vary significantly, particularly observing a variance in the no housing consumption of young,

middle-aged and old homeowners. While the young and elderly homeowners show higher

sensitivity to house price changes, the middle-aged homeowners show a lower level of

27
sensitivity. More importantly, house price appreciation increases the consumption and net-worth

in all the age groups while it simply improves the welfare of older homeowners. This implies

that renters and young homeowners are worse off due to higher lifetime housing consumption

costs. Additionally, it suggests that young homeowners are often liquidity constrained, resulting

from steep income profile and lack of access to credit. Conversely, older homeowners have a

shorter life expectancy horizon; hence, they can increase their non-housing consumption.

Furthermore, middle-aged homeowners have accumulated enough liquidity saving to overcome

the liquidity challenges and face a relatively longer expectancy horizon.

2.8 CONCEPT OF PROPERTY

According to Babatunde (2003), property can be defined as the bundle of rights or interests

contained in land and such right could be use, possession, occupation, right to desire income

there from through leading or outright sale. In another development Olayonwa (2003), described

property as right that can be exercised in land. He described property as bundles of right which

means property comprise many rights such as: for example:

i. Right to income arising from land

ii. Right of use and enjoyment in land

iii. The right to alienate or transfer land.

All these right are generally referred to as property rights. No individual has absolute property

right in land because there are certain rights in property that are reserved for the state through the

law of any nation. Therefore, private individual can only have exclusive right which can only be

exercised subject to superior right of the state.

In property laws of many nations the right a state have over private property includes:-

i. Right to tax income from private property

28
 ii. Right to take private property for public use

iii. Right to control the development and use of private property

Escheat.

Apart from the superior right of the state over private property rights there are private control on

land usage, which may further restrict the rights of an owner or occupier of landed property.

These are in the form of restrictive covenants easement profit appended, license and way leaves.

Therefore, any decision that has to be taken in respect of any landed property including decision

as to its management must be written the frame work of property right. Property manager must

have a good knowledge of the right of the property owner of other parties and that of the state the

limit of his action and control (Johnson, 2005).

2.8.1 TYPES OF PROPERTY

Real estate properties are classified according to the use to which they are being put. It is to note

also that the use to which a property is to be put determines the design and subsequently the

construction. The value 1s more concerned with the use to which a property is being put when

carrying out valuation, though not with regard for design and the construction. By the use, landed

property fall into eight main groups and it is easier to identify a property by the use than by

design and construction.

1) Residential Land Use

This is a collective terms used for human accommodation or shelter. The united nations come up

with a fundamental definition that stated that housing is not a shelter or housing facility alone but

comprised a number of facilities services and utilities which link the individual and family to the

community in which he grows and progresses (Chika, 2006).

29
Residential property is used as dwelling accommodation which otherwise known as houses. It

could be rural, urban, sub urban houses. It also varies in design e.g. bungalow, flat, tenant,

mansions, dethatched dwelling, semi-detached duplex, high rise building, boys quarter or out

house etc. the value of any residential properties will depend on the following :

i. Location: in common with all types of properties, residential estate depends chiefly on

their case of access to those locations which support related uses. Areas of employment

shopping facilities, schools, churches, places of entertainment, shopping facilities,

schools, churches, places of entertainment, recreational open space etc. accessibility is

achieved either by proximately of location or by good means of communication.

ii. Position: The most favored residential positions are set in pleasant natural surroundings.

iii. Physical Characteristics: The distinctive feature of all real properties as a codify is that

it has a long physical life. The design layout fashions in other tom avoid obsolescence's

(Niemeier, 2001).

There are different types of housing as described by various authors the dictionary of

architectures and construction by Soot (2010), identified the following classes of residential

properties.

i. Bungalow: This is a dwelling on a single/ground floor. A bungalow could be detached

where the unit is standing alone on the plot of land or semi detached/duplex bungalow

where two or more with a definite separating wall are located within the plot. It is also a

frame house or a summer cottage often surrounded by a covered veranda.

ii. Flat: Described as a suit of room one floor forming a complete residence here we have

several accommodation units within a building. Each unit will however have its own

separate convenience contained within it. Flats on each floor slightly different types of

30
 flats are luxury flat in apartment building. They are usually in low density area. They are

usually on many floors sometime high risk buildings are service within various facilities

like light, borehole, swimming pool, parking space, Garden Park, security and cable TV.

They usually contributed to a service charge account from which facilities are

maintained.

iii. Tenant Building: This is usually referred to a "face me I face you" it also has several

bedrooms each serving as an accommodation unit (and at times sitting and bedroom)

within a single building. All occupants will usually share the in continence which is

usually located at the back of the house. The term face me I face you came about because

the rooms are usually built on two rows with a big corridor separating them.

iv. Mansion: Defined as large and imposing dwelling, an apartment in a large building or a

man o house.

v. Mansonnette: It described as a two family house having quarter with separate entrances

for two families usually a story building house with a separate apartment on each floor.

This has several units within a building like flats it however differs from flats that it is on

two floors like duplex it will usually have the bedrooms on the top floor and sitting and

conveniences on the lower floor. A building containing mansonnette. Mansonette by

virtue of their design are usually referred to as flat on two floors. Examples of them exist

in 1004 flats (Mabogunje , 2004).

vi. Detached dwelling: is a building of dwelling which is completely surrounded by open

space. This is a single accommodation unit existing on two floors. It would usually have

the conveniences i.e. that are kitchen and toilet on the ground floors as well as family

31
 sitting and guest room the bedrooms as well as family sitting/lounge was on the first

floor.

vii. Semi dethatched duplex: a pair of houses joined by a parting or dwelling one side wall.

This differs from a dethatched house that there was two units built together but with a

definite separation within a plot where there are more than two units it is referred to as

Terrace house.

viii. High rise building: described as a building having a large number of floors, usually

constructed where land value are high and the utter most floor is reached by the use of

elevator and/ or steps.

ix. Boys quarters : these are small building located usually to the real of the main building.

It usually contains service unit convenience to the main house e.g. in the case of tenant. It

usually contains the kitchen, toilet and bathroom. For the residential houses the boys

quarter/out house will contain living units for services staff. In this case it will usually

contain the bedrooms and the conveniences (Monroe, 2007).

2) Commercial Land Use

This comprises of shops, office, warehouses, etc. used for business purposes. This related to

properties that are basically used for trading (building and selling). It is divided broadly in to

two:

i. Shops: such as chain stores, mobile shop, supermarkets, department stores and local

shops. Generally, the value of any given shops depends on location, position physical

characteristics.

32
 ii. Office premises: it may be mixed with shops or purpose built office accommodation.

The following attributes are relevant when assessing its value and considering it as an

investment medium ;

iii. Premises should comply with relevant laws and acts in that areas.

iv. Location may be an influence at obtaining suitable staff and client e.g. Central Business

District.

v. Tenants command more rent than if let to a single tenant.

vi. Characteristics of the premises have to be examined.

3) Industrial Land Use

These are property used for manufacturing purposes and store of goods. They comprise of where

house are factory building. In this category are every class of property primary used. For the

production of goods and services e.g. factories and warehouses location in relation to transport

system, availability of labor, market, and raw materials are important factors including (Arakun,

2001).

a) Construction condition and facilities of the building e.g. car packing etc.

b) The general layout of the building: the building should have good facilities for delivery and

dispatch of goods, storage and handling.

c) Provision of facilities for employees such as car packing, canteens and social areas (e.g. bars

and games center).

4) Recreational Land Use

33
They are properties meant for relaxation, sports and open spaces for comfort e.g. amusement

parks, hotels, beach, tourist centers, games reserves, clubs stadium and zoo etc. their attributes

effect values through facilities provided size.

5) Educational Institutional Land Uses

These are properties constructed for public use to acquire skill in different field of endeavors e.g.

schools, health centers, libraries, research centers, secretariat, parasternal (Nwuba, 2004).

6) Religious Land Use

These are properties used for the purpose of worshipping churches, mosques, shrines.

7) Agricultural Land Use

These are used for the cultivation of crops and rearing of animals e.g. farm land. Farm houses,

ranches, orchards etc.

Those factors that may affect the values of agricultural properties are:

i. Availability of nearby market where the farm produces was disposed.

ii. The topography of the land and climate of the district

iii. The size of the holding generally, smaller farm will yield a higher rent per hectare than a

large one.

iv. Natural features such as types and conditions of hedges.

v. The condition of fences and approach reads and efficiency of land drainage .

vi. Availability and genies such as water supply to the main drainage and electricity to farm

buildings .

vii. The provision and condition of dwellings and farm building.

8) Special Purpose Land Use

34
These are a class of Properties That cannot be readily found in the Property market (That is they

are not always bought or sold) They have distinctive features e.g. include cemeteries, churches,

mosques, shrines, are Public properties (building and utilities) to mention only but a few such

properties often have a quasi- mono poly element. Their attributes do not influence their

respective values because they are not found in the market as earlier stated (Donald, 2006).

However, attributes of landed properties influence their values generally in one way or the other

because the capital value of a property cannot be arrived at, if the attributes encompassed in the

property are not taken into consideration For example environment factors like climate

conditions, topography, to use of which adjoin property 1s being put, its accessibility (i.e. road

and communication network) type of interest (i.e. freehold or leasehold these affect the value

greatly in the sense that these factors help to determine the yield used in capitalizing the net

income. Also facilities and utilities like in high rise buildings, the one that has lift win command

a higher value than the one without a lift (Olusegun, 2000).

35
 CHAPTER THREE: RESEARCH METHODOLOGY

3.1 INTRODUCTION

This chapter of the study consider the method used in gathering data used for the study. The

chapter examined the issues concerning research design, the population, sample, and sampling

technique that was used in this work. The researcher examined the instrument for collection of

data, study population and sample frame, the procedure for data collection, questionnaire design,

and procedure for data analysis.

3.2 SOURCES OF DATA COLLECTION

The collected data used in this study was obtained from both Primary and Secondary sources:

PRIMARY DATA: These data are collected basically for this study, they have not been used for

any other purpose than this particular study, data gathered through the administration of

questionnaires, interviews, direct observation are the primary data adopted in this study. For the

purpose of this research, questionnaire and observation was use as primary source of data.

SECONDARY DATA: Refers to data collected from materials of past authors and scholars related

to the subject of this study. Such as textbooks, journals, conference papers, and internet surfing

forms the secondary sources in this research work. For the purpose of this research internet,

textbook was use as secondary source of data

3.3 STUDY POPULATION AND SAMPLE FRAME

i. Study population: The group of individuals in a study, in a clinical trial, the participation

make up the study population. The population study is 71.

36
ii. Sampling Frame: A sampling frame is a list of all the items in your population.

3.4 DETERMINATION OF SAMPLE SIZE AND SAMPLE TECHNIQUES

Sampling is a procedure or technique for drawing a representatives group of people or cases

from a specific population ( Creswell, 2002). The samples are drawn in this type of study where

it is difficult to obtain data from all memeber of the population. Hence, the sample survey

method provides an effective way of obtaining data from the population. To ensure a thorough

and derailed evaluation devoid of the ambiguity of a more expansive population, the study

population was evaluated using simple random sampling method and simple random sampling

techniques .

Based in the population size of 71 , the sample sizs was determined from Krejcie & Morgan

(1976) sampling table which indicated 63 sample for the population of about 75 at 95%

confidence level and 5% margin of error. Therefore, a sample size of 63 respondents were to be

used for data collection. See Appendix B for the table.

The formula is s = X2NP(1-P)÷d2 (N-1) + X2P(1-P)Where:

s = required sample size. X2 = the table value of chi-square for 1 degree of freedom at the

desired confidence level (3.841). N = the population size. P = the population proportion

(assumed to be .50 since this would provide the maximum sample size). d = the degree of

accuracy expressed as a proportion (.05).

Simple random sampling was used for this research as many of the previous researches

conducted on student's used for the random sampling (Kang & Ting, 2013; Semela, Bohl &

Kleinkneht, 2013 and Alkali and Rozilah, 2015). Random sampling depends on organising the

37
specified population, as indicated in Table 3.1 based on the students' list collected from Deanery

students' Affairs of BUK, then start selecting at intervals of 20th (Krejcie & Morgan 1976.

3.5 DATA COLLECTION INSTRUMENT

The following methods are used in collecting data for the purpose of this research work.

i. Field survey

ii. Questionnaire

iii. Interview

FIELD SURVEY: This is simple means of observing event as they occur through a reconnaissance

study of the study area. In this study, researcher therefore took a Walk round to the area of the

study. This helps the researchers in obtaining firsthand information on the study area and took

snapshot where necessary

QUESTIONNAIRE: A questionnaire is a research instrument that consists of a set of questions or

other types of prompts that aims to collect information from the respondent. This aid objectively

response. The questionnaire also limits the probability of irregular information as it specified

adequately the scope of response to the question asked.

INTERVIEW: This involves the meeting of people face to face, especially for consultation and it

is classified into three (3), these are; unstructured, semi-structured, and structure. Intensive Excel

interviews were conducted with the respondents to back up the questionnaire to seek information

on the assessment of estate surveyor and valuer methods in measuring depreciation in property

valuation.

3.6 INSTRUMENT DESIGN

38
This questionnaire consists of both opens and close ended questions. The open ended questions

are the use of questionnaire supported with the conduct of personal oral interview while the close

ended refers to those questions which the researcher provides the respondent which options from

which to choose a response.

3.7 METHOD OF DATA PRESENTATION AND ANALYSIS

The data gathered from the field was analyzed and presented with the use of frequency tables and

simple percentage.

3.8 LIMITATIONS OF STUDY

Research of this nature requires a logistics approach and detailed discussion for the purpose of

coming up with dependable solutions. However, the research work encountered constraints in the

following ways:

Inadequate finance was experience in carrying out this research work and inadequate time within

the frame of the work to be completed.

However, the above limitations did not in any way affected the validity of this research work.

39
 CHAPTER FOUR: DATA PRESENTATION, ANALYSIS AND DISCUSSION OF

RESULT

4.1 Introduction

This chapter is devoted to the presentation, analysis and discussion of results of the data gathered

in the course of this study. The data are based on the number of copies of the questionnaire

completed and returned by the respondents.

4.2 Data Analysis and Presentation

However, out of 63 questionnaires distributed, 60 0r 82% were retrieved from the owners of
respondents. This sum up to a total of 60 respondents which the analysis is base as shown in
table 4.1 below:

Table 4.1: Number of questionnaire distributed and retrieved from

Target population No of Questionnaire No of Questionnaires Percentage

Administered Retrieved Retrieved
Estate Surveyor and 11 9 81
Valuers
Property Developers 52 51 98

Total 63 60 82

This table shows the number of questionnaires administered to Estate Surveyor and Valuers and

property developers in Birnin-kebbi Township which is 63, while the total retrieved was 60 .The

implication of the table above shows that since majority of the questionnaire was retrieved it

makes information gotten from the respondents very reliable and can be used for this project.

Table 4.2 Gender of Respondents

Sex Frequency Percentage %

Male 55 91.67

40
Female 5 8.33

Total 60 100

Source: Field Survey, 2022

Table 4.2 above shows the gender distribution of the respondents used for this study. 55

respondents which represent 91.67% of the population are male. 5 respondents which represent

8.33% of the population are female. This shows that both genders were represented without

prejudice

Table 4.3 Age Grade of the Respondents

Age Frequency Percentage %

Below 20 years 3 5.00

21-30 years 13 21.67

31-40 years 18 30.00

41-50 years 14 23.33

51-60 years 12 20.00

Total 60 100

Source: Field Survey, 2022

Table 4.3 above shows the age grade of the respondents used for this study. 3 respondents which

represent 5% of the population is below 20yrs. 13 respondents which represent 21.67% of the

population are between 21-30yrs. 18 respondents which represent 30% of the population are

between 31-40yrs. 14 respondents which represent 23.33% of the population are between 41-

50yrs while the remaining 12 respondents which represent 20% of the population are between

50-60yrs.

41
Table 4.4 Educational Qualification of Respondents

Educational Qualifications Frequency Percentage %

WASCE/SSCE 9 15.00

OND/HND/BSC 19 31.67

MSC/PGD 18 30.00

PHD 14 23.33

Total 60 100

Source: Field Survey, 2022

Table 4.4 above shows the educational background of the respondents used for this study. Out of

the total number of 60 respondents, 9 respondents which represent 15% of the population are

SSCE/WASSCE holders. 19 which represent 31.67% of the population are OND/HND/BSC

holders. 18 respondents which represent 30% of the population are MSC/PGD holders while the

remaining 14 respondents which represent 23.33% of the population have Ph.D. certificate. This

depict that majority of the owners of abandoned building projects are educated people and thus,

information given are expected to be reliable and accurate for the purpose of making decision

and generalization.

Table 4.5 Types of residential property investment in the study area

S/N Types Frequency Percentage

1 Flat 17 28
2 Bungalow 25 42
3 Tenement 10 17
4 Mansion 8 13
Total 60 100
Source: Field Survey. 2022

42
The above table shows the types of residential investment in the study area. 28% of the building
investment were flat, 42% were bungalow, 17°% were tenement, while 13% were mansion. The
result therefore shows that flat and bungalow were the major type of residential building projects
in the study areas.

Table 4.6 Problem of residential property Investment in Birnin-kebbi Township.

Problems SA A UD D SD Mean Score Ranking

(5) (4) (3) (2) (1)
Choosing a bad Location 13 23 3 14 5 3.316 4th

Negative Cash flows 18 30 1 5 6 3.816 3rd

High Vacancy rate 9 15 20 8 8 4.15 1st

Lack of liquidity 10 16 9 5 20 2.85 5th

Problem Tenants 10 16 15 14 5 3.9 2nd

Note: SA (Strongly Agreed), A (Agreed), UD (Undecided), D (Disagree), SD (Strongly

Disagree) Source: Field Survey, 2022.
Table 4.6 above shows the responses of respondents that the problem of Residential Property

investments in Birnin Kebbi. with High vacancy rate ranking 1st with a mean score of 4.15,

followed by problem tenants ranking 2nd with a mean score of 3.9, followed by negative cash

flow ranking 3rd with a mean score of 3.816, followed by choosing a bad location ranking 4th

with a mean score of 3.316 and lack of liquidity ranking 5th with a mean 2.85

Table 4.7 Prospect of residential property investment in Birnin-kebbi Township

Prospects SA A UD D SD Mean Ranking

(5) (4) (3) (2) (1) score

Property location 10 16 15 14 5 3.9 1st

Investment purpose and horizon 16 10 9 5 20 2.95 4th

Cash flow and profit opportunity 8 15 9 20 8 2.91 5th

43
Indirect investment in Real Estate 18 30 5 1 6 3.883 2nd

New construction vs. Existing property 13 23 3 14 5 3.316 3rd

Note: SA (Strongly Agreed), A (Agreed), UD (Undecided), D (Disagree), SD (Strongly

Disagree) Source: Field Survey, 2022.

Table 4.7 above shows the responses of respondents that the Prospects of Residential Property

investments in Birnin Kebbi. with Property Location ranking 1st with a mean score of 3.9,

followed by indirect investment in Real Estate ranking 2nd with a mean score of 3.883, followed

by New construction vs. Existing property ranking 3rd with a mean score of 3.316, followed by

Cash flow and profit opportunity ranking 4th with a mean score of 2.95 andCash flow and profit

opportunity ranking 5th with a mean 2.91

..

44
 CHAPTER FIVE: SUMMARY, RECOMMENDATION AND CONCLUSION

5.1 Introduction

This chapter deals with the summary of findings, recommendations and conclusion.

5.2 Summary of Findings

From this study, it is unarguably clear that the residential investment situation in Birnin-kebbi

has since been in a problematic state and has created a problem of housing (residential)

shortage. Although efforts have been made by government to change this scenario, their efforts

have not very well paid off as can be evidenced through the inherent problems still facing the

development of residential housing by private developers. Government, through the

establishment of site and services scheme, allocation of land to willing developers, provision of

basic infrastructures e.g. access road, electricity, drainage, security etc, encouragement of local

manufacture of building materials, incentive to developers, among other strategies will promote

the development of residential housing. Also, Government cooperation with the private

individuals (ie public private partnership) and the improvement of credit facilities will attract

private developers to engage in this venture.

The eradication of these problems will give rise to the prospects of an easier access to land,

availability of finance through credit facilities, affordable cost of building materials, ease of land

acquisition which will create a conducive environment for the development of residential

housing thereby making residential housing available for those in need coupled with an

improved living standard.

45
5.3 Recommendations

i. Government should make available vital infrastructural facilities such as access

road, electricity supply, security, drainage in order to make parcels of land attractive for

housing development by prospective developers. They should also collaborate with

the private enterprise through the public private partnership initiative which will

make residential housing development a lot easier as the government cannot solve

the problems of inadequate housing independently.

ii. No form of development can take place without land; hence there needs to be less

difficulty in the acquisition of land. This can be achieved through the reduction in the

cost of land registration and titling, elimination of the bottlenecks and huge cost

involved in the acquisition of certificate of occupancy and getting governor’s consent.

iii. To overcome the challenge of limited finance, government should laise with banks to set

up mortgage scheme where willing developers can obtain loans at a reduced interest rate.

Also, the establishment of more mortgage and financial institution with the ability to

service loans should be promoted. Also, the establishment of industries for the

manufacturing of building materials should be encouraged.This will ensure availability of

building materials and at reduced cost. It will also reduce the cost of construction.

iv. An enabling environment which will attract developers needs to be provided

through the provision of adequate security and enactment of laws on land issues that will

improve the socio- economic environment and make residential housing

development attractive.

5.4 Conclusion

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Conclusion From the foregoing, it is clear that efforts made by government and other

stakeholders to eliminate the problems of residential property Investment, development is not

adequate enough as these problems are still in existence. These problems which have given rise

to shortage in residential property Investment cannot be handled independently by the

government. It needs to work hand in hand with private enterprises/investors by creating

conducive environment which will make residential property investment attractive to private

developers who are profit oriented. Once these problems have been handled effectively, the

prospects of residential property investment was achieved thereby making residential property

available and improving the economic condition and living standard of individuals.

PROBLEMS AND PROSPECT OF RESIDENTIAL PROPERTY INVESTMENT IN

BIRNIN KEBBI TOWNSHIP

BY

DALANDI KANTA

HEM/20/0604

BEING A PROJECT SUBMITTED TO

DEPERTMENT OF ESTATE MANAGEMENT AND VALUATION,

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 DIRECTORATE OF ENVIRONMENTAL PROGRAMMES,
WAZIRI UMARU FEDERAL POLYTECHNIC, BIRNIN KEBBI, KEBBI STATE.

IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR THE AWARD OF

HIGHER NATIONAL DIPLOMA IN ESTATE MANAGEMENT AND VALUATION

DECEMBER, 2022

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