Challenges Associated With Real Estate Investment

Challenges Associated With Real Estate Investment

Chapter One

Preface

Proper backing is each-important to successful property investment and development. colorful forms of finance on varying terms from different investing agencies are available to the property request. The top field where colorful forms of investment finance are employed is that of development where every loan has to be especially acclimatized for an individual scheme and the particular stages within the scheme.

Since property development in particular involves huge capital expenditure, finance is thus an essential input, the nature of which is to give capital to enable the enterprise operate commercially. The cost and vacuity of finance for real estate development can impact the viability of similar design.

Inspite of the significance of development finance in property development, there’s dearth of information on the quantum of backing that takes place, by whom, or the system used. Though this isn’t unanticipated given the general characteristics of development backing there’s no central agency or institution to co-ordinate the business of property backing.

In the scale of man’s requirements, casing has been ranked second and as a result of this; casing provision has come a consummate conerstone of the programs of colorful governments both at civil and state situations since independence in Nigeria. The consequences of the rapid-fire rate of urbanisation are most visible in the rapid-fire deterioration of civic casing performing in civic casing poverty especially as there’s no commensurate increase in the number of casing stocks.

The house occupies a veritably unique position in the life of all mortal beings and stands out as one of the introductory musts of mortal beings after food as there’s the ingrain desire of every man to enjoy a decent house. It’s the most single commercial investment or consumer of income.

For utmost working Nigerians, the earning capacity is generally low and makes it virtually insolvable for the average Nigerian to save towards retaining a house. In addition, the abating profitable fortunes in Nigeria which dims the capacity of individualities to enjoy a house.

The profitable smash ages of the 1970s also contributed to the casing problems in Nigeria.

During this period, there was supernumerary capital, the profitable climate also was favourable for the development of real estate and the prospect of gain was over blown and so were the rate of development. The oil painting smash brought in an period of civic development, which was further all anticipation and therefore led to a massive swell in property development. fiscal houses readily obliged inventors ’ loans, as they perceived minimal pitfalls.

still, with the crash in oil painting prices in the early 1980s, the frugality was thrown into heads and recession therefore set in which poorly affected the real estate sector. Since real estate investment and development requires huge capital disbursement, there’s always the need for real estate investors and inventor to source for fund. This capital is generally advanced than the equity capital of such an invertor and the only way out of this dilemma is to reference for set up through other means piecemeal from his particular savings.

Which other sources of finance piecemeal from equity capital are available to the real estate investors? What problems are being encountered in getting finances through these colorful sources?

Background To The Study

Real estate has continued to play a significant part in man’s elaboration. It isn’t a coexistence that food, sanctum and apparel believed to be the three rudiments that sustain humanity, also have some relation to land. Food grows out of land while sanctum is fixed to it, and man’s apparel is made largely from what grows out of land. Indeed, whether in ancient times or moment’s ultramodern system, land constitutes a significant indicator for man’s wealth, and as profitable conditioning have assumed further complication over time, land has continued to play a central part in their development( Lewis, 1994). There’s hardly any business adventure that doesn’t bear to be supported by some form of real estate from the small business that requires real estate as services from where its business can be organized, to the major adventure that needs it for its plant.

Accordingly, through some veritably robust and well allowed out land programs exhaustively address challenges that are hassle in the real estate sector. This isn’t exactly the situation then in Nigeria and the result is that there’s a myriad of problems in the real estate sector( Adewale, 2000). In the course of this study, the experimenter will give an overview of real estate investments in Nigeria and its associated challenges.

Real estate investment is naturally connected to the profitable development and well being of any nation, thereby challenging some intervention by prudent governments. similar interventions vary in degrees, depending on the nation. In Nigeria, existent could infrequently lay claim to any part of it as proprietor and thus couldn’t alienate it without the concurrence of the head.

Proper backing is each-important to successful property/ real estate investment and development. colorful forms of finance on varying terms from different investing agencies are available to the property/ real estate request. The top field where colorful forms of investment finance are employed is that of development where every loan has to be especially acclimatized for an individual scheme and the particular stages within the scheme. Since real estate and property development in particular involves huge capital expenditure, finance is thus an essential input, the nature of which is to give capital to enable the enterprise operate commercially( Ratcliff, 1999). The cost and vacuity of finance for real estate development can impact the viability of similar design. It’s necessary to examine the nature of real estate investment in Nigeria with a view of chancing results to the associated challenges.

Statement Of The Problem

In recent times, exploration on real estate investment has been on the frontal burner has it’s the major source of casing for man. In the scale of man’s requirements, casing has been ranked second and as a result of this; casing provision has come a consummate foundation of the programs of colorful governments both at civil and state situations since independence in Nigeria. The consequences of the rapid-fire rate of urbanization are most visible in the rapid-fire deterioration of civic casing performing in civic casing poverty especially as there’s no commensurate increase in the number of casing stocks.

During the period of profitable smash in the 1970s in Nigeria, there was supernumerary capital, the profitable climate also was favorable for the development of real estate and the prospect of gain was over blown and so were the rate of development. Due to the recent drop in the prices of crude oil painting world wide and corruption, government has not been suitable to invest in real estate. Overpopulation and urbanization has led to massive increase in property development.

fiscal houses readily obliged inventors ’ loans, as they perceived minimal pitfalls.

Since real estate development requires huge capital disbursement, there’s always the need for real estate inventor to source for fund. still, this study will examine the compass of real estate in Nigeria and its associated challenges with a view of making useful suggestions on the way forward for real estate in Nigeria.

Objects Of The Study

The following are the objects of this study

1. To give an overview of real estate investment in Nigeria.

2. To examine the challenges associated with real estate investment in Nigeria.

3. To identify the way forward for real estate in Nigeria.

Exploration Questions

1. What’s the position of real estate investment in Nigeria?

2. What are the challenges associated with real estate investment in Nigeria?

3. What’s the way forward for real estate in Nigeria?

thesis

HO Real estate investment has no challenges in Nigeria.

HA Real estate investment has several challenges in Nigeria.

Significance Of The Study

The following are the significance of this study

1. The findings from this study will educate the general public on the benefit of real estate investment and its associated challenges which will form the base for guidance in decision timber.

2. This exploration will also serve as a resource base to other scholars and experimenters interested in carrying out further exploration in this field latterly, if applied will go to an extent to give new explanation to the content.

Compass/ Limitations Of The Study

This study on real estate investment and its associated challenges in Nigeria will cover the extent of real estate investment in Nigeria looking at the factors that has eased or hindered it. It’ll also cover the challenges associated with real estate investment in Nigeria.

Limitation Of Study

fiscal constraint-inadequate fund tends to stymie the effectiveness of the experimenter in sourcing for the applicable accoutrements , literature or information and in the process of data collection( internet, questionnaire and interview).

Time constraint- The experimenter will contemporaneously engage in this study with other academic work. This accordingly will cut down on the time devoted for the exploration work.

Description Of Terms

Investment an investment is a financial asset bought with the idea that the asset will give income in the future or appreciate and be vended at a advanced price.

Real estate property conforming of land or structures.