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Barriers to real estate investments for residential rental purposes: mapping out the problem

    Adriana S. C. Pires Affiliation
    ; Fernando A. F. Ferreira Affiliation
    ; Marjan S. Jalali Affiliation
    ; Hsiao-Chen Chang Affiliation

Abstract

The recent economic crisis led to significant changes in the real estate market; one of which was a shift toward home rental (rather than buying). Real estate investors have an important role in the growth of the rental market. However, there are often hindrances to investing for residential rental purposes. In order to overcome these barriers, they first need to be identified and understood. With this in mind, the main focus of this investigation was the creation of a conceptual model, through fuzzy cognitive mapping, to identify and understand the cause-and-effect relationships between the factors that represent an obstacle to real estate investments for residential rental purposes. The results show that cognitive maps can be of great use for the structuring of complex decision problems, minimizing the number of factors left out of the decision making process. In particular, the tenant risk behavior, property location and associated costs (for the owner) were identified as the main obstacles to real estate investment rental propose. The practical implications of the model, as well as the advantages and limitations of the process followed, are also discussed.

Keyword : cognitive mapping, decision aid, investment, renting, residential real estate

How to Cite
Pires, A., Ferreira, F., Jalali, M., & Chang, H.-C. (2018). Barriers to real estate investments for residential rental purposes: mapping out the problem. International Journal of Strategic Property Management, 22(3), 168-178. https://doi.org/10.3846/ijspm.2018.1541
Published in Issue
May 16, 2018
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This work is licensed under a Creative Commons Attribution 4.0 International License.

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