Engineering and Construction
Pages 4 (1004 words)
[REAL ESTATE INVESTMENT PERFORMANCE] (Name) (Instructor/Tutor) (Course/Subject) (Institution/ University) (City, State) (Date) [REAL ESTATE INVESTMENT PERFORMANCE] Real estate investors have adopted various qualitative and quantitative measures to gauge performance.
According to Feng, (2010, p, 11), Internal Rate of Return and property based portfolios have also been used. The quantitative and qualitative measures of real estate investment performance are useful, but they have some limitations, in the real estate investment decision-making process. This is because of the complex nature of real estate investment. Therefore, it may be difficult to absolutely appraise performance in real estate investment. In reference to Albert Einstein’s quote, “Not everything that can be counted counts and not everything that counts can be counted," it is worthy to note that there is no precise method of performance method that includes all the important elements and leaves out elements that do not contribute to performance measurement. In measuring real estate investment performance, real estate investors and managers, as well as, analysts use methods such as Simple Pay-Back and Simple Return on Investment (ROI) models (Muldavin, 2010, p, 98). These models may be partially effective because they take into account factors such as the amount of return earned or associated with real investment. However, Simple Pay-Back and Simple Return on Investment models are essentially faulty because they fail to consider revenue or risk (Muldavin, 2010, p, 98). ...