Real estate as an investment asset

Abstract

The present text focuses on perceiving real estate property as an investment asset that generates a certain amount of revenue to its owner, assuming expected risk and the expected level of liquidity. The first step is to determine the open market value of the selected property, which represent the expected expenses of the investment costs incurred (taking into account other acquisition costs), then we determine the open market rent value, which is the expected return on the selected property, then identify possible business risk associated with the commercial use of real estate and finally, the liquidity of the entire investment is estimated. In conclusion, methods for evaluating investments are applied to assess the realization of the investment – acquisition of the selected real estate for commercial purposes, the estimated return time and the percentage of the return on investment is calculated of the paper.