BUIL1273: Property Finance and Capital Markets Report Assignment Help
Question
BUIL1273: This assignment for RMIT University, Australia demands the student to imagine themselves in the role of an investment advisor for a particular family office. It has been remarked that some of the family members have recently shifted to Perth, and have been advised to look for opportunities for investment in the real estate market of Australia. The Business student is required to analyze all the aspects and assess whether the family’s money should be invested entirely in direct Perth real estate, partially in indirect real estate, or a combination of the two.
Solution
Students pursuing a Bachelor of Business at RMIT University find it difficult to navigate this assignment, as the assignment requires a thorough understanding of background analysis and DCF analysis for the data provided in the task file. OAS delivers the best quality Business assignment help in Australia by addressing the specific demands of the requirement and demonstrating specialized knowledge of investment related concepts. This solution incorporates an extensively written report by our highly qualified subject matter experts, half of which you can read below:
Summary
As per the proposed structure of the report, our experts have first provided a brief summary of what can be expected from the report.
Perth real estate is a promising investment opportunity due to its high returns and low acquisition costs. The report analyzes a $1,500,000 investment in the real estate property with a 9% average annual rental yield for the next 14 years. The Residential Property Price Index tracks price fluctuations in residential dwellings, with national median home values rising by 412% over the past 25 years (Aussie 2018). The DCF analysis estimates annual rent and operating expenses, vacancy rate, and tax implications. Debt financing is a mortgage home loan with a 25% debt ratio, DCSR determining the maximum loan amount for real estate investors.
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Choice of Direct Real Estate Investment
In providing Bachelor of Business assignment Help, the next part briefly discusses the impact of investing directly in Perth real estate investment. We have provided a snippet of the complete section here.
Perth real estate is considered the best in the current scenario due to its high returns and low acquisition cost. New estates range from $800,000 and above.
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Historical performance of direct real investment
This is followed by a thorough examination of the past patterns in the performance of Perth real estate. This will help in justifying whether this would be a wise investment or not. We provide the best assignment writing services in Melbourne by supporting the arguments with data from relevant and credible sources.
Over the past 25 years, the housing market has seen unprecedented transformation, with national median home values rising by 412%. The increase in the ASX All Ordinaries index is 261%.
Building the index for direct investment
Australia’s housing boom in 2021 led to a strong property market, with Perth experiencing a positive trend and a 0.6% increase in median home prices.
Assumptions for the Residential Property Price Index:
The residential property price index tracks price fluctuations in residential dwellings. It examines detached homes, semi-detached homes, row homes, and terrace homes, combining established home and attached dwelling costs.
Discounted Cash Flow Analysis for Direct Investment:
As described earlier the initial cost of the property is $400,000.00 and assumed to be acquired in 2009. The annual rent is based on recent data which denotes that Perth’s weekly rental cost reaches $582, the highest among capitals.
Debt Financing for Direct Investment:
The debt ratio is 25% in direct investment. The mortgage home loan is the sort of debt financing in this scenario. It refers that the investor will get a loan of $600,000.00 and will secure the loan with the collateral which is the acquired house.
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Choice of Indirect Real Estate Investment
The next section outlines the consequences of investing indirect in real estate investments, as per the family’s investment potential.
Other than the analysis of investment in direct real estate return from indirect real investment is also analyzed.
Goodman Group (GMG)
The wide range of real estate investments includes businesses and office parks, logistics facilities, and warehouses. The group made its debut on the Australian securities exchange (ASX) in 1995. GMG has a global footprint across 16 countries.
Stockland (SGP)
With more than seven decades of experience in the real estate business, Stockland is also one of the largest diversified real estate groups engaged in the development of commercial as well as residential properties. Their portfolio consists of industrial estate, shopping centres, manufactured housing communities and housing estates.
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Historical Performance of GMG and SGP
While providing Bachelor of Business assignment Help to analyze the historical trends of indirect real estate investments, our experts have researched and supported the arguments presented by scholarly articles.
GMG
SGP
Building Index for indirect investment:
Similar to the residential property index, this index is built with historical data related to the 5-year period commencing on 31st December 2018 and ending on 31st December 2022.
Discounted cash flow analysis:
The dividend yield and stock value appreciation are utilized to compute the cash flow from the stock investment. The investment is analysed for the same period that is from 2010 to 2023. The cash flow for a year is the sum of dividends and capital appreciation in that year.
Performance and DCF analysis:
The customized index represents that direct and indirect investment is positively correlated. The average return for the last five years was 14.13% in the context of indirect investment. The GMG provided an average return of 15.12% whereas SGP provided a 7.21% return.
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Comparison between Direct and Indirect Investment
The following section demonstrates a clear contrast between the two real estate investment strategies. If you are a student of RMIT University and need help in this assignment, don’t hesitate to reach out to OAS.
Direct investing offers greater control in decision-making, allowing investors to select properties based on location, product type, or structure, with transparency into asset information and key players. On the other hand, by purchasing shares in a fund or REIT, one can participate in the entity’s overall investment strategy without having any control over or exposure to changes in geopolitics, currency values, or the economy. Direct real estate offerings have varying fee structures, and platforms have different business models. Investors should compare and contrast options carefully.
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Risk Calculation
Furthermore, our experts have also provided a brief discussion of the risks associated with both investments to allow for informed decision-making. This is how we assure high grades to the students through the Bachelor of Business assignment Help provided to them.
REITS by far are highly used as means of diversification and a stable source of income in traditional portfolios and as a means for real estate investing which otherwise would not be possible given the high-ticket size of each investment. Underlying properties of REITS are by far highly leveraged mainly due to the nature of the real estate business. Therefore, the risks of REITs are highly linked to the underlying leverage of the properties. Australian REITs managed to generate an average return of 11.9%.
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Conclusion
This is followed by a short conclusion of all the important findings from this report, half of which you can read below:
Direct real estate investing offers possibilities for gain, cash flow, and tax breaks with the opportunity to control and manage the actual property. Real estate investors unable to purchase property will consider REITs. Also, beginners in the industry will likely select REITs over direct investment. Thus, the investor should opt for a combined investment in the property and REITs.
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