Learn about how to think of the discount rate when using the NPV metric.
- But what is the actual discount rate,…the rate that we're going to discount…the future cashflows back?…There are two different ways…that a lot of people look at it.…For what you may have heard out there…if you've ever heard about discount rates…is you're going to hear this concept…called the weighted average cost of capital.…And that's something that a lot of firms use…as a starting point to calculate their discount rate,…which is just how much did it cost them to borrow…or to get that capital…that they're now considering making this investment with?…And that could be if it's from a bank,…there's a interest rate on that loan that they're getting.…
Or if they have investors,…there's some kind of a minimum return…that they're expected to give the investors…and the weighted average between the two…gives them their weighted average cost of their capital.…But then for the discount rate,…usually what people want to do…is to also factoring things like risks and opportunity costs…so that the discount rate is a little bit higher…
Note: This course uses data and example properties from the United States, but the concepts taught and tools provided are just as useful for any market.
- Determining if real estate investment is right for you
- Choosing a market and a property
- Using financing
- Strategies for first-time investors
- Real estate market cycles
- Valuing a property
- Analyzing your market
- How leverage impacts investments
- Real estate investment case studies
Skill Level Appropriate for all
Excel: Analyzing and Visualizing Cash Flowswith Curt Frye1h 16m Intermediate
Learning Real Estate Photographywith Scott Hargis3h 21m Beginner
Managing Your Personal Investmentswith Jane Barratt1h 31m Appropriate for all
Start here3m 29s
1. Case Study: Joe's First Investment
2. The Many Ways to Invest in Real Estate
3. Real Estate Market Cycles
4. How to Value a Property
5. Understanding Your Market
6. What Makes a Good Investment?
7. Understanding Leverage
8. Case Study: Rental Income Property Analysis
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