REAL ESTATE INVESTMENT RISKS: ESSENCE, CAUSES OF THREATS, EVALUATION METHODS

Abstract

In the article, the author substantiates the relevance of investing in real estate and the inherent risk in these processes. It is noted that many factors influence decision-making regarding investing in real estate. The essence of the concept of "risk" is investigated, approaches to the interpretation of risk are generalized, the dualistic nature of investment risks is noted, which can cause losses or lead to high profits. It is found that risks and their nature are determined by the specifics of industries and areas of activity. The author defines the risks of investing in real estate projects as the probability of certain results, which are determined by the system of influence of internal and external environmental factors, force majeure circumstances, as well as targeted influences of stakeholders. The reasons that cause the occurrence of negative consequences from investing in real estate are systematized (in particular, the absence or insufficiency of information about the project, the absence or incorrectness of the forecasting model, changes in the regulatory framework, conscious or unconscious actions of developers that lead to the loss of funds by investors, macroeconomic, technical and technological, marketing risks of loss of invested investment resources, force majeure circumstances, etc.). The author also describes the methods used to assess investment risks (in particular, economic and statistical methods, the method of expert assessments, the method of cost feasibility analysis, the method of analogues, economic and mathematical methods and models, etc.). The significance of the study is due to the possibility of applying theoretical results in practice in terms of understanding the nature of the risks of investing in real estate, avoiding unsuccessful decisions and assessing the risks of investing in real estate using the described methods.