RETURN AND RISKS IN REAL ESTATE INVESTMENT: A CURSORY LOOK AT THE UYO PROPERTY MARKET

Akwapoly Journal of Communication and Scientific Research (APJOCASR)

Abstract

Real estate investing is a popular choice for many investors, who often assume it will always result in a positive return due to its unique characteristics. Unfortunately, this is not always the case. Sometimes, investors' expectations still need to be met, and the outcome is far from what they had anticipated. As a result, investing in real estate requires careful consideration and understanding of the potential risks and rewards. Thus, the paper hinges on assessing the return and risks in real estate investment in Uyo, Akwa Ibom State. Consequently, identifying the significant risks involved in real estate investment and assessing the factors that bring about negative cash inflows in the sector is the fulcrum of this paper. The study utilizes a survey design and collects data primarily from questionnaire responses provided by resident surveyors in Uyo to accomplish its objectives. Data from the field is collated and analyzed for interpretation using the Relative Importance Index. The result shows that high interest rates, high cost of building materials and tenants' preferences are the significant factors that affect returns. It also reveals that people invest in real estate for a steady income and long-term financial security. Nevertheless, findings identify asset, market, location, and financial risks as significant in real estate investment. In contrast, poor management, high maintenance costs, high financing costs, and voids are causes of negative cash inflows. The paper recommends boosting the economy's manufacturing sector to enhance the production of suitable quality building materials at reduced rates and providing capital at low interest rates.