Effect of real estate investment strategies on financial performance of investment groups in Kenya

Abstract

The study sought to examine how real estate investment strategies affect the financial performance of Investment groups in Kenya. Its objective was to investigate the investment strategies adopted by investment groups popularly known as chamas in Kenya and the effect of these strategies on the financial performance of the groups. Descriptive research design was adopted in this study targeting a population of members from 50 registered investment groups in Nairobi with emphasis on real estate property investors in Nairobi. Primary data was used for the study and was gathered through survey questionnaires which were administered to the investment groups in Nairobi. Microsoft Excel was used to analyze the data as well as SPSS that was used to generate data. The results were presented using figures, tables and cross tabulations. There was a positive correlation between financial performance and all investment strategies with a beta of 4.496 specifically buy and hold strategy and own and operate posting results of great effect on financial performance of chamas. Out of these findings, the researcher recommends that investment groups should brainstorm among members to adopt a strategy that yields greater returns and seek advisory services to help them manage real estate investments. Secondly this study recommends that investment groups should explore local economic environment that are most suited with domestic and multi-domestic strategies instead of global strategies. The study further observes and recommends blending of real estate investment strategies that are best suited for the investment groups. It also recommends further research to be done on the advantages and challenges faced by the real estate investment groups in adoption of real estate strategies in global market and its effects on profits especially in an imperfect market.