Study On Real Estate Portfolio Investment Dispersing Risk

For promoting real estate develop and guarding against risk, especially loan risk, real estate investor should expand new finance pattern. On the other hand, they should bring new ideas about real estate investment. The high-speed development demands new real estate investment theory.Modern portfolio investment theory is mainly used in the field of stock market. The dispersing risk is its major role. According to different choice of risk and profit for investor, it is essentially different combination of finance product. It is popular that no put all eggs in only one basket. Using the concept in real estate investment now, it is marked clear that investment should be in many ways. The returning rate is more higher for high-risk in real estate investment item, comparatively more lower for low-risk item. Consequently, it is a decision question how to differ fund in all kind of real estate investment item through diversifly differing risk and forming composite competitive superiority to win minimum risk in the same of risk. Because of long period development in American, the real estate securities has become in the age of 70, and has been initially studied by modern portfolio investment theory. But now the study is still few in our county. Actually, with the development of real estate in our county, reasonable combination in real estate investment is objective question and necessity result in the management of real estate. Based on the experiences of the Western developed countries in property investment and modern portfolio investment theory, the paper introduces the conception of systematic and unsystematic risk with the center of risk and profit. With the intrinsic risk of real estate, we study dispersing function of portfolio investment theory and reach the conclusion that portfolio investment can disperse risk. Consequently, the model of real estate base on least risk and anticipated profit is studied in the discussion of its concerned hypothesis and determining the concerned parameters. By living example analysis, we reach the conclusion that portfolio investment risk is smaller than single investment if the investor adjusts the tactics of portfolio investment.