A Study of Investment Decisions of Rental Flat Companies in Gothenburg - It is all about the inertia!

Abstract

A study of rental flat companies in Gothenburg where undertaken in order to see if the current economic climate is taken into account when they make investment decisions. The present housing deficit along with an economic climate of uncertain nature creates an interesting setting. When analysing previous research the authors found a gap in knowledge in the area of Swedish rental flat companies. Through semi-structured interviews with CFOs of seven rental flat companies in the Gothenburg region knowledge about practice was obtained. The results presented show a large difference between theory and practice. It is obvious that rental flat companies do not fully take the current economic climate into account in their models. A need for inertia has been given as a reason for this. The findings will hopefully contribute to a better understanding on the current housing deficit. A possible new factor has been found, the use of too high rates in investment decision calculations.