Applied Research On Real Option In Real Estate Investment Decision

With the recovery era coming of the financial crisis, the complexity and integration of global economic are deepening, the current international context is complicated and changing, the competition among enterprises is no longer confined to customer demand, competition for resources, etc., but more reflected multi-level, strategic, dynamic competition of decision-making level. For the real estate industry, the importance of investment decisions is increasingly taken seriously by businesses. From the domestic environment, as the gradual implementation of control policies of China's central and local, real estate of China enterprises are facing increasingly uncertain business environment, how to improve the effectiveness of decision-making becomes an imperative business. Real option is an effective method to solve the problem of uncertainty as a new thing in the era of knowledge economy. The effectiveness of real options applied to the uncertainty of investment projects has been proved by foreign theory and practice experience, but in the practical application of our business from the real options approach does not get due benefits, most businesses do not apply or not correctly use the real option approach. With the maturity of real option theory and model, it will be applied to decision-making of real estate investment, the value of flexibility will be reflected and quantify in decision making, make up the deficiencies of traditional decision-making methods, to make investment decisions more scientific, effective, and increase the value of investment projects. Therefore, in view of the characteristics of our real estate investment projects, it has very important theoretical and practical value to research the application of real option model and thinking. It is to promote the use of real option theory to investment decision in China's real estate, and to promote the establishment of scientific, reasonable and effective investment decision-making system of the real estate.This paper focuses on the central issue of how to improve the application of real option theory to investment decision-making of real estate widely and effectively, doing some research in the application from the basic ideas and fuzzy model of real options, the design of investment decisions of real estate projects in China of real options in multi-level and multi-angle, this is the main work and innovation. This paper has more practical significance facing high uncertainty of the current environment. The basic ideas of real options proposed will help the decision makers to combine the present and future together, and find potential opportunities for the future, in order to maximize the uncertainty of environment, increasing investment opportunities and flexibility of the project value, with an actual case of real options are discussed in detail about the application program, improving anti-risk ability and firms make investment decisions level of the real estate investment projects in China from the decision- making methods, with some practical significance.