Financial Analysis of Real Property Investments（不动产投资的财务分析）.pdf

9-379-193 R E V : J U L Y 2 2 , 2 0 0 3 W I L L I A M J . P O O R V U Financial Analysis of Real Property Investments This note examines some of the methods by which real property investments are analyzed, including those most commonly used and others that will serve for purposes of comparison or illustration. It also offers suggestions about analytical techniques and provides sources of useful information. The reader should be aware throughout that a successful analysis of a real property investment must consider many critical characteristics that are not easily reflected in the mathematics of a financial analysis. Among these are (a) the extremely long time horizon involved, (b) the lack of liquidity, and (c) the effects an ever-changing environment. In short, the investor must temper financial analysis with an understanding of the risks involved before proceeding. The task of analyzing a real estate investment may be divided into three components: 1. Cash flow The amount of cash annually received by the investor, including revenues generated and financing proceeds realized, minus all cash expenses incurred, with the exception of income taxes; 2. Tax effect The amount by which the investment affects the taxes payable in the current year by the investor; 3. Future benefits The amount by which the capital position of the