Predicted property investment returns: risk and growth models

Nick French

Journal of Property Investment & Finance, 2019, vol. 37, issue 6, 580-588

Abstract: Purpose - The purpose of this paper is to discuss the principal measures of performance used in property and other investment types. In particular, the briefing will explore the relationship of the expected IRR with the initial return, highlighting the role of growth in the investment dynamic. Design/methodology/approach - This education briefing is an overview of investment growth models with worked examples. Findings - The analysis of property growth models is akin to the Fisher and Gordon growth models used in other finance markets. Practical implications - This comparison of the models can work for all forms of investment. Similarly, instead of looking at the overall return as the measure of comparison (expected vs required), it is possible to work backwards and deduce market expectations and compare these with the investors view on those variables. Originality/value - This is a review of existing models.

Keywords: Growth; Property investment; Target rate; Expected rate of return; Internal rate of return; IRR; Performance measurement (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:jpifpp:jpif-07-2019-0096

DOI: 10.1108/JPIF-07-2019-0096

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