Rent Default and Residential Properties: Construction Portfolio for Real Estate Investors in Uyo, Akwa Ibom State, Nigeria

Abstract

This study examined rent default in residential properties in Uyo, Akwa Ibom State, Nigeria with the aim of identifying the types of properties with higher rent default so that real estate investors can be guided in their construction portfolio. The population for the study comprised 48 practicing estate surveying and valuation firms in Uyo. A total of 427 residential properties which the tenants defaulted in rent in the property management portfolio of the firms were selected for the study. Descriptive statistics which included
percentage and mean, and inferential statistical tools which include Analysis of Variance (ANOVA) and regression were used to analyse the data collected. The result revealed that self-contained which constituted 33.5% of the total rent default. By property type, 2-bedroom flats had the longest duration of rent default as tenants owed rent for average of 16 months. By year, year 2018 is when the longest duration of rent default was experienced as tenants owed for 15 months on the average. The study concluded that self-contained
had a higher frequency of rent default than other residential properties while 2-bedroom flats took a longer time before rent was renewed. The study therefore recommends that investors should be careful in their real estate portfolio to avoid the risk of concentrating many of one types of residential property especially self-contained and 2-bedroom flats in the portfolio. Also, much attention should be given to professional selection of tenants.