康奈尔大学课件2.pdfVIP

Investment Property Analysis Peng Liu Cornell University ©2008, Peter Liu, Cornell University, Page 1 Introduction What is Real Estate Investment Property? - Any property held for production of income – rent Single-property real estate investment decisions RE investment analysis and Real Estate Transaction – Generally associated with acquisition decisions. – Might be for hold/sell decision. – Relationship to financing decision/analysis. Why we should care about investment analysis? – Applicable with some modifications to different accounting/taxation system. – Benchmarking for foreign investors. ©2008, Peter Liu, Cornell University, Page 2 Introduction Why own real estate? – Low correlation with stocks and bonds – Inflation protection (appreciation return)? – High current yields (sometimes) – Moderate to low risk (favorable risk/return characteristics) – The negatives are ??? ©2008, Peter Liu, Cornell University, Page 3 Proforma How should investors reach investment property decisions? Why property investment analysis is necessary? – Proforma Framework – Proforma (forecasting cash flows) 1. Forecasting cash flows from the operation 2. Forecasting cash proceeds from the eventual sale – Investment Analysis 3. Converting uncertain future cash flow streams into PV 4. Applying decision-making criteria to compare the expected benefits and costs. ©2008, Peter Liu, Cornell University, Page 4 Cash Flow Proforma ©2008, Peter Liu, Cornell University, Page 5 Step I: Cash Flows from Operations Potential Gross Income PGI less: