ABSTRACT
The last decade has seen phenomenal investments in real estate. According to a report by
Wisconsin School of Business in 2016, Association of Foreign Investors in Real Estate
(AFIRE) with an estimated $2 trillion or more in real estate assets under management
globally, reported intention to increase their investment in US. Real estate investment
contributed 9% of Kenya's GDP in 2016. In Kisumu City, real estate investors have a total
per annum return of 13.3%, with an income yield of 4.8% and annual capital appreciation
of 8.5% which is considered as low. However, despite many studies on the subject of
investment, none covers how financial and non-financial factor appraisal contributes to
choice of investment. They also do not investigate other areas of investment by the real
estate investors. Therefore, choice and extent of investments by real estate investors, the
contribution of non-financial appraisal factors and the contribution of financial appraisal
factors, in choice of investments by real estate investors in Kisumu City, are unknown.
The general objective was to establish contribution of investment appraisal factors in
investment choices by real estate investors in Kisumu. Specifically the study sought to
establish choice and extent of investments by real estate investors, establish contribution
of non-financial appraisal factors in choice of investments by real estate investors and
establish contribution of financial appraisal factors in choice of investments by real estate
investors in Kisumu. The study was anchored on Rational Choice Theory and adopted a
descriptive research design. The target population was all 9900 real estate investors in
Kisumu. Sample size was 385, obtained using stratified sampling technique. Primary and
secondary data were obtained using semi-structured questionnaire. Reliability test at
Cronbach’s Alpha threshold of 0.7 was done using pilot test results obtained from a survey
of 10 investors and yielded coefficient of above 0.701 implying internal consistency.
Face, Construct and Content validity test were done using expert reviewers. Data analysis
was done using descriptive statistics. The findings are that the choice and extent of
investments’ overall mean response score for all the investments was 3.000, coded as
moderate meaning that the extent of investment is moderately practiced by real estate
investors in Kisumu. The highly rated non-financial appraisal factors were operational
benefits (Mean = 4.000, Std. Dev =1.37), risks (Mean = 4.00, Std. Dev = .533), public
image (Mean = 4.00, Std. Dev = .840), and power and prestige (Mean = 4.00, Std. dev =
.614), payback period (Mean = 4.000, Std. Dev =1.29) and capital outlay invested (Mean
= 4.00, Std. dev = 1.32), meaning that they were highly considered and highly rated in
terms of financial appraisal factors by investors, The study concludes that choice and
extent of investment is moderately practiced; contribution of non-financial appraisal
factors and financial appraisal factors in choice of investments by real estate investors is
moderate. The study is expected to benefit prospective investors in making future
investment choices, government in formulating investment policy and researchers in
conducting further research.
ODHIAMBO, F (2021). Contribution Of Non-Financial And Financial Investment Appraisal Factors In Influencing The Choice Of Investments By Real Estate Investors In Kisumu City, Kenya. Afribary. Retrieved from https://afribary.com/works/contribution-of-non-financial-and-financial-investment-appraisal-factors-in-influencing-the-choice-of-investments-by-real-estate-investors-in-kisumu-city-kenya
ODHIAMBO, FLORENCE "Contribution Of Non-Financial And Financial Investment Appraisal Factors In Influencing The Choice Of Investments By Real Estate Investors In Kisumu City, Kenya" Afribary. Afribary, 06 May. 2021, https://afribary.com/works/contribution-of-non-financial-and-financial-investment-appraisal-factors-in-influencing-the-choice-of-investments-by-real-estate-investors-in-kisumu-city-kenya. Accessed 10 Nov. 2024.
ODHIAMBO, FLORENCE . "Contribution Of Non-Financial And Financial Investment Appraisal Factors In Influencing The Choice Of Investments By Real Estate Investors In Kisumu City, Kenya". Afribary, Afribary, 06 May. 2021. Web. 10 Nov. 2024. < https://afribary.com/works/contribution-of-non-financial-and-financial-investment-appraisal-factors-in-influencing-the-choice-of-investments-by-real-estate-investors-in-kisumu-city-kenya >.
ODHIAMBO, FLORENCE . "Contribution Of Non-Financial And Financial Investment Appraisal Factors In Influencing The Choice Of Investments By Real Estate Investors In Kisumu City, Kenya" Afribary (2021). Accessed November 10, 2024. https://afribary.com/works/contribution-of-non-financial-and-financial-investment-appraisal-factors-in-influencing-the-choice-of-investments-by-real-estate-investors-in-kisumu-city-kenya