AN EVALUATION OF THE PERFORMANCE OF RESIDENTIAL PROPERTY INVESTMENTS IN MINNA

Abstract

Residential property investment in urban areas in Nigeria is an important investment medium for rational investors. On this basis, this study evaluated the performance of residential property investments in Minna, Nigeria. Data for the study were collected through field survey using multi-stage sampling technique. This involved the selection of estate surveying and valuation firms which are active in the residential property market in Minna through purposive sampling technique and thereafter, residential investment properties managed by these firms were selected using simple random sampling technique. Thus, a total of 382 residential investment properties were selected from the property portfolio of estate surveying and valuation firms in the city for the study. Structured questionnaire was administered to the managers of these properties for data collection. Data collected for the study include the capital value, annual expenses in form of taxes, rates, repairs etc. and annual rental value of 1-BR, 2-BR and 3-BR apartments for the period, 2009 – 2021. Data collected for the study were analyzed using descriptive and inferential statistical techniques. The analysis of variance in total return produced calculated F˗values of 2.139636, 2.928597 and 2.941148 for 1-BR, 2-BR and 3-BR apartments respectively with p ≤ 0.05. This indicates that the variance in total return for all residential investment property types across all the study locations is statistically significant. The study also found that the risk associated with this return varies according to the residential property investment types across all the locations considered in the study. It recommends that prudent residential real estate investors in the city require impeccable pre-investment appraisal of residential property investments at all locations in the city before investing their capital, particularly if they are risk averse.