USING CAPITALIZATION COEFFICIENTS TO ASSESS THE EFFECTIVENESS OF BORROWING FOR REAL ESTATE INVESTMENTS

The article analyzes the possibilities of assessing the effectiveness of using borrowed funds for real estate investments using capitalization ratios. The features of using these indicators, as well as their advantages and limitations, are identified. The factors affecting the values of capitalization ratios are identified, their mutual dependence is specified, and ways of using the results of comparing the main ratios are proposed when making investment decisions. Based on the results of the calculations, the minimum terms of mortgage loans, the values of the total capitalization ratio, and the maximum interest rates for various combinations of factors affecting the values of the ratios have been determined in order to meet the conditions for the efficient use of borrowed funds. The use of the excess ratio for an operational assessment of the efficiency of using borrowed funds for real estate investments has been proposed, and a formula for its determination has been presented. The conclusions are supported by economic calculations.