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Benchmark definition in real estate9/14/2023 ![]() ![]() Types of real estate benchmarking indicators The process starts by setting benchmarks for each indicator based on their accept/reject criteria which subsequently are used to compare the desirability of the real estate properties thus providing context and point of reference on the properties' financial characteristics and profitability standing. ![]() Indicators are particularly important in real estate since it deals with a physical entity- a bricks and mortar structure, which might trigger emotions on the investor based on its architecture and beauty. Indicators in general allow investors to remove emotions and speculation out of investing this is true not just in real estate investing, but on any other investment types such as stock or currency trading. Real estate benchmarking consists of a group of real estate financial indicators and their benchmarks. Examples include the net cash flow, total rental incomes, or the internal rate of return. The individual indicators are referred to as key performance indicators, or KPI for short. In a narrow sense, the term real estate benchmarking refers to the specific real estate indicators used to measure the real estate properties. In the general sense, real estate benchmarking refers to the comparison of potential real estate investment properties against a predetermined framework of measurement. ![]() Real estate benchmarking is the standard of measurement used to analyze the financial characteristics of a real estate investment property. ( March 2018) ( Learn how and when to remove this template message) Please help to improve this article by introducing more precise citations. This article includes a list of references, related reading, or external links, but its sources remain unclear because it lacks inline citations. ![]()
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