Title Risk Identification Techniques in Valuation and Investment Appraisal

  • Authors

    • Jibril Danazimi Jibril
    • Zainab Toyin J
    • . .
    2018-08-24
    https://doi.org/10.14419/ijet.v7i3.30.18158
  • Appraisal, Investment Appraisal, Property Valuation, Risk, Techniques.

  • This study investigated the risk analysis in property valuation and investment appraisals in Nigerian estate firms, this was carried out through the risk identification techniques. Risk and uncertainty are the inherent part of the valuation and appraisal process. Self-administered questionnaire was employed using likert scaling to collect the data from 95 estate surveying and valuation firms, while the data was analyzed using descriptive statistic. The study revealed that the most peculiar risk to real estate valuation and investments is legal risk base on the ranking. Investment appraisal reports however indicated that sensitivity analysis is the most used technique. In view of the above, the certainty equivalent and Monte Carlos stimulation was recommended if all things are equal in respect of availability of data and a stable economic situation. The study identified legal risk is the major risk found in valuation and investment appraisal, thus the result indicated that, Surveyors in the study area have very little knowledge of risk and uncertainty as revealed in their reports. Finally it was recommended that, a lot need to be done on the level of awareness and understanding valuers toward incorporating risk and uncertainty in property valuation and investment appraisal.

     

  • References

    1. [1]. Ajayi C. Theories, Technique and Practice of Development Appraisal. Being the text of an invited paper presented at a National Training Workshop of the Nigerian Institution of Estate Surveyors and Valuers; 1996; Lagos, Nigera.

      [2] Chandra. Investment Analysis 3/E. Tata McGraw-Hill Education; 2008. 766 p.

      [3] Byrne P. Fuzzy analysis: A vague way of dealing with uncertainty in real estate analysis? J Prop Valuat Invest. 1995 Aug 1;13(3):22–41.

      [4] Baum AE, Crosby N. Property Investment Appraisal. Wiley; 2014. 345 p.

      [5] Ogunba O a., Ajayi C a. The response of Nigerian valuers to increasing sophistication in investors’ requirements. J Prop Invest Finance. 2007 Feb 13;25(1):43–61.

      [6] Ogumba O. The Adequacy of Nigeria Feasibility Studies in the Context of Global Feasibilty Study Standards. Univ Lagos Niger. 2008;

      [7] Adair A, Hutchison N. The reporting of risk in real estate appraisal property risk scoring. J Prop Invest Finance. 2005 Jun;23(3):254–68.

      [8] Babayemi J., Dauda K. Evaluation of Solid Waste Generation, Categories and Disposal Options in Developing Countries: A Case Study of Nigeria. J Appl Sci Environ Manag. 2009;13(3):83–8.

      [9] Huffman FE. Corporate real estate risk management and assessment. J Corp Real Estate. 2003 Jan 1;5(1):31–41.

      [10] Knight FH. Risk, Uncertainty and Profit. Courier Corporation; 2012. 450 p.

      [11] Knight FH. Risk, Uncertainty and Profit. New York, NY: Harper; 1921.

      [12] Ajayi K. Risk and Uncertainty in Property Development Appraisal, A case study of Lagos Metropolis. Department of Estate Management: University of Lagos; 2014.

      [13] Hargitay SE, Yu S-M. Property investment decisions: a quantitative approach [Internet]. 1st ed. London: E & FN Spon; 1993 [cited 2018 Jul 9]. Available from: http://lib.myilibrary.com/browse/open.asp?id=31641&entityid=https://shib2idp.ntu.ac.uk/idp/shibboleth

      [14] Ajayi C. Property Investment Valuation and Analysis. In Ibadan: De-Ayo Publications; 1998. p. 165–202.

      [15] Ogunba O. How Adequate are Market Analysis in Pre-development Appraisal Reports. Dep Estate Manag Univ Lagos Niger. 2011;

      [16] NIESV. Directory of Estate Surveyors and Valuers. Nigerian Institution of Estate Surveyors and Valuers. Lagos, Nigeria; 2014.

      [17] Atilola M. Practitioners’ perception of risk in Viability Studies: A study of Lagos Based Estate Surveyors. Seminar paper presented at: Seminar Appraisal; 2008; Department of Estate Management, University of Lagos, Akoka, Nigeria.

  • Downloads

  • How to Cite

    Danazimi Jibril, J., Toyin J, Z., & ., . (2018). Title Risk Identification Techniques in Valuation and Investment Appraisal. International Journal of Engineering & Technology, 7(3.30), 70-73. https://doi.org/10.14419/ijet.v7i3.30.18158