In this lecture, walk through an example to see how different investments generate different NPVs.
- All right, now let's see how the NPV…and the concept of the discount rate…is applied in an Excel format…so that you can get a better understanding…of these concepts.…So let's look at the first one right here.…First you've got to download this file.…This file is part of the file here that you can download,…and just go to the NPV worksheet here.…You can ignore the other ones for now…'cause we're going to use this file again later…to look at the internal rate of return.…All right, this first part here is the one future payment.…
All right, if we have a future payment,…let's say of $1000 coming in five years,…and it's discounted at 10%,…what is its net present value today?…So we see here that it calculated at 621.…So if I click on this right here,…we see the formula.…The formula is saying it is equal to the future payment…divided by one plus the discount rate,…which is raised to the power of five years.…
And if you change any of the assumptions here,…so let's say if you increase the value in the future,…then this will increase.…
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 Intermediate
Managing Your Personal Investmentswith Jane Barratt1h 31m Intermediate
Learning Real Estate Photographywith Scott Hargis3h 21m Beginner
Excel: Analyzing and Visualizing Cash Flowswith Curt Frye1h 16m Intermediate
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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