Real Estate Investment Decision-making Model Research And Application

This paper combining domestic and foreign researches of real estate investment portfolio theory,is used to study how to apply the real estate investment portfolio theory to investment decision-making in the rapid development of the real estate market in china. The application of modern portfolio theory in the financial field has been gradually mature, but the application in the real estate investment market is very limited, and less in the rapidly developing real estate market in China. Because the governments use policies to regulate and control the real estate market and the real estate market itself is competitive, the risk of real estate project investment is increasing. The real estate investors need to seek a better method for investment decision. Therefore, this paper studies and constructs the investment decision-making model of the real estate project based on VaR theory,in order to use some simple formulas to obtain distinct results and make the model provide an easy operation process and specific content easy to understand as far as possoble. Hope this paper can provide reference for the majority of real estate investors, and guide them to make rational investment decisions.This paper first introduces the investment situation and the real estate industry background,and put forward the research significance of the present real estate investment portfolio theory used in investment in the real estate market environment, at the research situation of domestic and foreign investment in real estate projects.Then it elaborates the real estate investment portfolio theory briefly.Again in the process of real estate development, investment portfolio is one of the important content in making decisions. When real estate investors make decisions,they need to predict future market of real estate, to estimate the impact of various technical and economic data of economic benefits, such as yield, recovery period. However, these predictions and estimations tend to be subjective, can not accurately reflect the objective situation, thus they may lead to mistakes in decision making. VaR constraints proposed in this paper under the log decision method for portfolio can remedy this defect. Finally this paper uses portfolio decision model to analies a case of real estate investment and demonstrates the real estate project portfolio decisions are practical.At the end, this paper proves that the model is effective and practical through the example.