Present Value (PV) and Property Investment

The present value (PV) is the estimated value today of all cash flows associated with a property investment (excluding investment cost, CF0) over its holding period discounted at the investor's required rate of return.  It is an indirect measure of investment performance as it provides the maximum price that the investor can pay in order to... Continue Reading →

Required Return for Property Investment

When considering the acquisition of a property, investors need to determine a minimum required return, which then can be used in the analysis of the expected cash flows of the property as the discount rate for estimating the maximum acquisition price that would allow the investor to achieve that minimum required return. In more technical terms,... Continue Reading →

Invest Smart: Target Under-supplied Property Markets and Sub-markets

Why Investors Should Target Under-supplied Property Markets Investors have better chances of achieving double-digit returns by targeting under-supplied property markets because such markets are more likely to produce strong capital growth.  Appreciation or capital growth is one of the most important, if not the most important source of return for real estate investments.  Capital growth is... Continue Reading →

Adjustable-Rate Mortgages and Smart Property Investing

Adjustable-rate mortgages (ARMs) or variable-rate mortgages (VRMs) refer to mortgage loans with a variable interest rate that is adjusted at pre-determined regular intervals according to the movements of a market Index Rate. More specifically, the interest rate of an ARM is determined by adding to an Index Rate a predetermined spread, or margin. The spread is... Continue Reading →

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