Abstract
This article presents modified factors to analyze efficiency of getting real estate loans by profit-making organizations. These factors make allowance for the characteristic features of real estate lending transactions such as their long-termness, and uneven stream of cash-flows. Total value of net cash return from a real estate lending transaction is typically discounted revenue, which we calculated both pretax and post-tax. Taxation is shown to exert a considerable impact on discounted revenue position. Real estate lending transaction financial leverage effect is calculated for the whole duration of the investment project, with allowance for time value of money. DOI: 10.5901/mjss.2014.v5n24p70
Highlights
Economic benefits from calling for a credit on real estate and credit funds will be derived by to those organizations which invest these money means
While estimating efficiency of obtaining a credit on real estate for investments, Russian and foreign scientists usually confine themselves to computating cash receipts from the real estate lending transaction and financial leverage effect according to the classical method
This research aims to work out modified indexes to analyze efficiency of employing credits on property, with due regard to the characteristic features of real estate lending transactions
Summary
Economic benefits from calling for a credit on real estate and credit funds will be derived by to those organizations which invest these money means. There is no complex method to deal with real estate lending transactions and this issue does not receive its due attention This determines relevance of this research, as well as theoretical and practical importance of its findings. While estimating efficiency of obtaining a credit on real estate for investments, Russian and foreign scientists usually confine themselves to computating cash receipts from the real estate lending transaction and financial leverage effect according to the classical method. These indexes do not make allowance for the characteristic features of real estate lending transactions such as their long-termness, and uneven cash-flow during the year. This research aims to work out modified indexes to analyze efficiency of employing credits on property, with due regard to the characteristic features of real estate lending transactions
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