Relationship Between Tenant Characteristics and Lease Performance Indicators in Nigeria: A Case Study in Ibadan

Abstract

This study examined the relationship between tenants’ characteristics and lease performance indicators in Ibadan, Nigeria. The Data for this study were obtained from the Estate Surveying and Valuation firms, and information on tenant characteristics was obtained from the tenant’s acquaintance forms in their portfolio. Out of the one hundred and five (105) Estate Surveying and Valuation firms surveyed, only 85 (80.9%) provided access to the required data for this study. The totality of cases identified (through the records of the Estate Surveying and Valuation firms) suitable for the analysis was one hundred and seventy (170) tenants, which accounted for tenants who were expected to have spent at least two years in their rented accommodation, representing 80.9% complete responses on information on the tenants. The data from the retrieved copies of the questionnaire were analysed using frequency distribution tables, factor analysis, weighted mean score and correlation analysis. Findings from the factor analysis revealed that affordability was the most significant criterion considered by property managers for tenant selection. Findings from the weighted mean score further revealed that affordability was seen as the most significant factor that measures lease performance in the study area, corroborating the findings of the factor analysis. The correlation analysis revealed that there was a strong positive correlation between tenants' characteristics and lease performance. In ensuring the success of rental properties, this study emphasised the crucial role of a meticulous tenant selection process by highlighting tenant characteristics such as tenants' financial capabilities, vetted personal information, solid references and guarantors, and demographic characteristics amongst others that are essential in the tenant selection process. The study recommended that property managers should keenly take into consideration the abovementioned tenant characteristics to ensure lease performance and, in turn, residential property investment performance to ensure the investors meet their investment objectives.