Harnessing Real Estate Investment through Proper Tenant Selection in Nigeria
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Emerald Group Publishing Limited
Abstract
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Purpose - The main objective of investment in real estate is to derive adequate returns from its
·management; selection of suitable tenants is one of the challenges to attaining this in Nigeria. Many
prospective tenants of residential properties usually appear good at the recruitment stage but often
become belligerent with grave challenge to the property managers. The paper aims to examine the
criteria set by property managers in selecting residential tenants in Nigeria with a view to establishing
a proper process for identification of potentially bad tenants at the recruitment stage.
Design/methodology/approach - The paper opted for an exploratory study with questionnaires
administered to estate surveyors (professional property managers in Nigeria). Respondents were
randomly selected based on Bartlett et al's model with margin of error set at 0.05, p = 0.5, and
!-value= 1.96. Relative importance index analysis of the data was carried out to determine the ranking
of the criteria.
Findings - The paper provides insight into tenant selection through proper process using a weighted
scorecard. It suggests that an application of a scorecard will reduce the incidence of bad tenancy and
enable investors to derive value from investment in real estate.
Research limitations/implications - The framework of tenant selection process adopted was
based on criteria set by the respondents; researchers are therefore encouraged to test the applicability
of the suggested weighted scorecard.
Practical implications - There are implications for development of computer software using the
weighted scorecard to further ease the process of tenant selection and make it an inter-disciplinary
study.
Originality/value - This paper identified the need for proper tenant selection to enable investors in
residential property to harness adequate and remunerative return.
Keywords
HD Industries. Land use. Labor, TA Engineering (General). Civil engineering (General), TH Building construction