A Student Centered Model for Analyzing Real Estate Investment Return & Risk using Algorithmic Discounted Cash Flow Pro Forma Simulation Analysis
نویسنده
چکیده
Simulation analysis of ex ante real estate investment returns can provide greater insights into real estate investment risks. Many real estate professionals fail to utilize risk-based metrics when valuing real estate properties, even after the benefits of representing returns as a range of probability-based outcomes have been widely publicized. The model created and described is this paper addresses these concerns by utilizing a subjective discrete probability model strategically positioned between manual “what-if” analysis and more advanced Monte Carlo simulation. It is envisioned that such a program will help stimulate a more deliberate discussion and understanding of real estate return volatility within the classroom, thus serving as platform that encourages the adoption of more advanced risk analytics in the real estate profession.
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