The Limits of Small-Scale Landlords: Binding Constraints to Residential Real Estate Investment Expansion

Small-scale landlords in the private rented sector make a critical contribution to the supply of affordable residential accommodation to prospective tenants. However, they face several constraints, resulting in the shortage supply of affordable residential dwellings aggravated by the growing demand in the rental market. This phenomenological qualitative study explores the limiting constraints to residential real estate investment expansion of small-scale landlords operating in the Downtown area of Davao City. Face-to-face interviews were conducted with five small-scale landlords and the qualitative data was analyzed using the Delphi technique. Six main themes emerged: (a) being business-minded with the opportunities; (b) making dwelling units available; (c) allocating income to expenditures; (d) investment decisions and financial challenges; (e) other regulatory and marketing limitations; and (f) long-term investment. The findings revealed that the most prevalent type of landlords in the area is subsistence landlords. Furthermore, the most important factor is financial constraints, whereas the least important factor is building regulations. This study is useful to alleviate the perceived constraints of small-scale landlords toward investment expansion and, therefore, produce more residential properties that will significantly contribute to the supply of affordable rental accommodation.