Internal Rate of Return as a Tool for Calculating the Discount Rate When Evaluating Real Estate Investments

One of the problems of investment analysis is to ensure that the applied methods of evaluating real estate investments comply with the conditions of use of the valuation object. This determined the relevance of the study. The hypothesis of the study suggests that an increase in the accuracy of calculating the projected cash flows generated as a result of using the valuation object, it is possible by applying the method of calculating the discount rate that is the most consistent with the investment conditions. The purpose of the study was to substantiate the use of the internal rate of return as an indicator that most realistically reflects the investor's expectations from investing in a real estate object. To substantiate the conclusions obtained, the interpretation of the calculation results in comparison with the results obtained by other methods is given. Specific examples show the sequence of calculations of the average internal rate of return. The application options of various modifications of the method are analyzed depending on the initial data on the use of real estate objects. The main differences and limitations in the application of the considered methods of calculating the discount rate are revealed. The main directions and possibilities of using these methods for making investment decisions in the real estate market are determined.