Decision Theory and Its Relevance to Real Estate Development Decisions
Daniel Ibrahim Dabara *
Estate Management Department, Federal Polytechnic Ede, Osun State, Nigeria
Ankeli Ipkeme Anthony
Estate Management Department, Federal Polytechnic Ede, Osun State, Nigeria
Odewande Adeleye Gbenga
Estate Management Department, Federal Polytechnic Ede, Osun State, Nigeria
Oluwasegun Adeyanju
Estate Management Department, Federal Polytechnic Ede, Osun State, Nigeria
*Author to whom correspondence should be addressed.
Abstract
The major purpose of this study is to critically examine decision theory with a view to identifying and evaluating its relevance to real estate development decisions. The theoretical research approach was adopted for this study. The study revealed that real estate development involves taking risk and is often characterized by great complexities and inherent uncertainties. The study showed that since resources are limited, a choice has to be made among the various real estate investment alternatives. The study further showed that decision theory is very much relevant in real estate development decisions because by assessing the risks, complexities and uncertainties associated with real estate development, the decision maker is better placed to make a more informed and “better” decision. It was recommended that real estate appraisers should familiarize themselves with the various relevant decision models appropriate for real estate development decision-making. This will help them to better serve their clients by making better decisions on viable real estate developmental projects.
Keywords: Decision theory, appraiser, development, real estate, investment, risk