A new evaluation procedure in real estate projects

Abstract

Purpose

The main purpose of this paper is the formulation of an integrated procedure for the evaluation of real estate investments.

Design/methodology/approach

The main methods for evaluation of real estate investments are presented initially. The paper analyses both the academic and the professional points of view of all these methods and compares them to each other, denoting that they could be implemented in the evaluation of real estate projects. Also, it presents the internal and external variables that influence the evaluation.

Findings

The primary focus is the calculation of the investor's interest (required return) in relation to the risk of the investment. In this framework the most common financial methods that have been used at an academic level in an attempt to estimate the risk‐return ratio of an investment are used and relevant proposals based on the available data and practices are made. The use of these components in a real estate investment in the Greek real estate market is tested empirically, giving future trends and prospects.

Originality/value

A new integrated procedure for the evaluation of real estate investments is proposed. This methodological approach helps in effective property management and decision making in real estate projects.

Citation

Liapis, K.J., Christofakis, M.S. and Papacharalampous, H.G. (2011), "A new evaluation procedure in real estate projects", Journal of Property Investment & Finance, Vol. 29 No. 3, pp. 280-296. https://doi.org/10.1108/14635781111138091