Effect of Residential Property Location on Tenants’ Willingness to Pay in Akure, Nigeria

Abstract

The study examined the effect of residential property location on tenants’ willingness to pay in Akure with a view to providing adequate information that would help in residential property investment decision making in the study area. A structured questionnaire was used in collecting data from the tenants of residential properties within the selected areas. Questionnaires were distributed to Two Hundred and Eighty Two Tenants of residential properties that were selected via simple random sampling method. One hundred and ninety six (196) were retrieved representing 69.50% of the sample selected. Data collected were analyzed using contingent valuation and binary logistic regression model. Result of data obtained revealed that 57.14% of the respondents responded positive willingness to pay for residential property location while 42.86% reported zero willingness to pay for residential property location. The study further showed the bid amount tenants were willing to pay for various improvements in the residential property location, 49.11% of the respondents are willing to pay between 5-10% above the current rent for traffic noise reduction. For provision of infrastructure such as good road, electricity and water supply, 30.36% of the respondents are willing to pay between 5-10% above the current rent. Factors that influence their willingness to pay for residential location includes length of stay in the property, marital status, age, occupation, income, rent, nearness to place of work, security, electricity supply and water supply amongst others. It was recommended that real estate property owners and developers should consider location critically before embarking on residential property building projects in order to yield optimum returns.

Keywords: Residential Properties, Residential Properties Location, Tenants, Willingness to pay.

DOI: 10.7176/EJBM/14-3-03

Publication date: February 28^th 2022