Everyone likes to own a piece of land they can call their own. This can be as shelter or as increasingly the case is turning out to be as a worthwhile investment. Real estate would include homes, offices, retail spaces, parking lots, apartments, warehouses, etc. It is a tangible, immovable asset. Insurance and pension funds […]
Real Estate Investments
Real Estate Valuation: Part 1 (Cost and Sales Comparison Approach)
Investing in real estate is not a simple decision. It requires mature investment taking capacities. Information inflow in the real estate market is complex. Investing in a company is far easier. Investing in a commercial building, however, has some complex plays in it. Real estate has certain characteristics that make it difficult to simply divide […]
Real Estate Valuation: Part 2 (Income Approach)
In Real Estate Valuation Part 1 we discussed the complexity of valuing real estate. VIP Realty discussed two of four approaches of real estate valuation. They were the cost approach and sales comparison approach. In this part, we will discuss the Income Approach for valuing real estate. The Income Approach: This approach treats the net […]
Real Estate Valuation: Part 3 (Discounted Cash Flows)
This approach is called Discounted After-Tax Cash Flow Approach. This method is used as a supplement to the other valuation methods, such as cost, sales, and income approach. Under this approach, the investor calculates the net present value of after-tax cash flows from the property discounted by his required rate of return. For the investment […]
Real Estate Portfolios
In developed countries such as US and Europe, there are real estate indexes that provide a measure of average returns on real estate investments. Other countries also have recently developed real estate indexes. The returns from real estate consist of income and capital appreciation. Measuring the income from a property is easy but assessing appreciation […]
CFA Level 1 – Real Estate Investments
This video by Arif Irfanullah provides a very clear conceptual understanding of the alternative investments: real estate as a part of the CFA Level 1 syllabus. This video talks about: Forms of Real Estate Investment Valuation Approaches Cost Approach Sales Comparison Approach Income Approach Discounted After-tax Cash Flow Approach