ProjectClue.com We're Ready, Call Us

(+234) 07030248044

Project Topic:

REAL ESTATE RISK AND ITS IMPLICATION FOR PROJECT VIABILITY (A CASE STUDY OF EKEDO RESIDENTIAL ESTATE)

Project Information:

 Format: MS WORD ::   Chapters: 1 - 5 ::   Pages: 47 ::   Attributes: Questionnaire, Data Analysis, Abstract  ::   1,318 people found this useful

Project Department:

ESTATE MANAGEMENT UNDERGRADUATE PROJECT TOPICS, RESEARCH WORKS AND MATERIALS

Project Body:

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND TO THE STUDY

Real estate investing involves the purchase, ownership, management, rental and/or sale of real estate for profit. Improvement of realty property as part of a real estate investment strategy is generally considered to be a sub-specialty of real estate investing called real estate development. Real estate is an asset form with limited liquidity relative to other investments, it is also capital intensive (although capital may be gained through mortgage leverage) and is highly cash flow dependent (Syz, 2008). If these factors are not well understood and managed by the investor, real estate becomes a risky investment. The primary cause of investment failure for real estate is that the investor goes into negative cash flow for a period of time that is not sustainable, often forcing them to resell the property at a loss or go into insolvency. A similar practice known as flipping is another reason for failure as the nature of the investment is often associated with short term profit with less effort (Clayton, 2007).

Management and evaluation of risk is a major part of any successful real estate investment strategy. Risks occur in many different ways at every stage of the investment process. For instance mitigation strategy for fraudulent sale is to verify ownership and purchase title insurance.Real estate owners often assume risk on their property exposure in response to unavailability of coverage. While risk retention by ‑ financially sound companies may help to reduce their cost of risk, absence of insurance is not always desirable. In many cases, property owners are required under the terms of their loan covenants to maintain full insurance to value, with restrictions placed upon the amount of deductibles they may carry (Fisher, 2005). Additionally, under high-deductible or self-insurance programs, operating companies no longer have a budgeted premium, and payment of unexpected retained losses creates potential cash  flow problems. Finally, property owners or management of companies have no ability to charge the full cost of retaining property risk to their clients. Although real estate markets represent a large proportion of total wealth in both developing and developed countries, the real-estate derivatives markets are still lagging behind in volume of trading and liquidity with has greatly influenced project viability (Black, 1986). Over the last few years there has been increased activity in developing derivative instruments that can be utilized by asset managers to reduce real estate risk. The possibility of financial loss occurring as the result of owing a real estate investment and its implication on project viability will be focused on in this study. Real estate risk might arise from such things as liability, legal issues, partner problems that can force a sale, fire or theft, loss of rental income and purchasing property with an imperfect title.

1.2   STATEMENT OF THE PROBLEM

Real estate management is a particularly difficult challenge because of its tendency towards liquidity.Typically, even published indices in real estate are based on annual appraisals oflarge properties, not actual transactions. The recent unprecedented recession has resulted in major long term distress across the real estate industry, and has had severe implications for owners, developers, managers and investors alike. Environmental and construction exposures, catastrophic modeling, stricter lender requirements, and complex requirements involving distressed banks are just some of the risks facing the real estate industry. The researcher however will examine the real estate risks and its implication of project viability.

1.3   OBJECTIVES OF THE STUDY

The following are the objectives of this study:

  1. To identify the risks involved in real estate investments.
  2. To examine the effect of real estate risk on project viability
  3. To identify ways to minimize risk in real estate investment.

1.4   RESEARCH QUESTIONS

  1. What are the risks involved in real estate investments?
  2. What is the effect of real estate risk on project viability?
  3. What are ways to minimize risk in real estate investment?

1.5   HYPOTHESIS

HO: Real estate risk does not affect project viability

HA: Real estate risk does affect project viability

1.6   SIGNIFICANCE OF THE STUDY

The following are the significance of this study:

  1. Result of this study will educate the general public, investors and estate managers on the real estate risks, how it can be minimized and its implication on project viability.
  2. 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/LIMITATIONS OF THE STUDY

This study on real estate risk and its implication on project viability will cover all the risks an investor is exposed to in real estate with a view of understanding its effect on viability of project.

LIMITATION OF STUDY

Financial constraint- Insufficient fund tends to impede the efficiency of the researcher in sourcing for the relevant materials, literature or information and in the process of data collection (internet, questionnaire and interview).

Time constraint- The researcher will simultaneously engage in this study with other academic work. This consequently will cut down on the time devoted for the research work.

Get the complete project »

Instant Share On Social Media:

OTHER SIMILAR ESTATE MANAGEMENT PROJECTS AND MATERIALS

CHALLENGES OF MANAGEMENT OF PUBLIC RESIDENTIAL PROPERTIES IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 79 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   9706 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Public residential property management is the operation, control, and oversight of real estate as used in its most broad terms. Management indi...Continue reading »

IMPACT OF REAL ESTATE SECTOR TO THE ECONOMIC GROWTH OF NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 70 ::   Attributes: Questionnaire, Data Analysis,Abstract

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY The Real Estate sector offers a great potential source of growth forNigeria. Until now, the understanding of its composition and growth has bee...Continue reading »

ROLE OF THE STATE GOVERNMENT IN THE DEVELOPMENT OF RESIDENTIAL ESTATES IN NIGERIA (A CASE STUDY OF OGUN STATE GOVERNMENT)

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 75 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   3526 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Few residential estates built across Nigeria by both federal and state government has been able to meet the housing needs of many Nigerians. Sh...Continue reading »

ABUJA LAND AVAILABILITY CHALLENGES AND MISMANAGEMENT: ISSUES AND SOLUTIONS

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 70 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   2693 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Abuja the Federal Capital Territory of Nigeria has tremendous importance in the country's life and development.It is a hotbed for political...Continue reading »

EFFECT OF LANDLORD AND TENANT RELATIONSHIP ON RESIDENTIAL PROPERTY

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 75 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   5686 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Maintaining healthy landlord-tenant relationship in a residential property is a pre-requisite for societal advancement and growth. Good tenant e...Continue reading »

ISSUES AND CHALLENGES IN THE EXECUTION OF PUBLIC SECTOR HOUSING PROJECTS IN NIGERIA

 Format: MS WORD ::   Chapters: 1-5 ::   Pages: 78 ::   Attributes: Questionnaire, Data Analysis,Abstract  ::   7152 engagements

CHAPTER ONE INTRODUCTION 1.1 BACKGROUND TO THE STUDY Housing (Shelter) is unarguably one of the basic necessities of man. It used to be ranked second after food in the hierarchy of man’s nee...Continue reading »

What are looking for today?

WHAT OUR CUSTOMERS ARE SAYING:
  • 1. Jeremiah Oboite from University of Lagos said "Thank you for such a good work, I have gone through it and it is really good. I appreciate the effort. God bless. Regards".
    Rating: Excellent
  • 2. Maduka Austin from University Of Nigeria Nsukka said "Thank you for your sincerity and prompt delivery, i tell you, you guys will go places if you maintain your sincerity and continue like this. I will recommend anyone to patronize you. God bless you guys ".
    Rating: Excellent
  • 3. Hassan Dardisu from Maryam Abacha American University Niger said "This’s very wonderful experience. ".
    Rating: Excellent
  • 4. Hassan Dardisu from Maryam Abacha American University Niger said "This’s very wonderful experience. ".
    Rating: Excellent
  • 5. Jamilu Idris Muhd from Sule Lamido University Kafin Hausa said "very wonderful effort".
    Rating: Excellent
  • 6. Abubakar Khalifah @Pkhal_Official from Bayero university kano (BUK) said "Indeed very knowledgeable and helpful. EXCELLENT!!!".
    Rating: Excellent

Leave a comment: