Analysis of Investment Attractiveness of Real Estate Investments

In the framework of this work, a study of the fundamentals of investment planning is conducted and an approach is proposed to the development of investment strategies based on forecasts made using modern methods of predictive analysis and time series analysis. The aim of the work is to develop a strategy for investment in real estate for the next ten years, which will allow the investor to get the maximum return on investment. The object of the study is the real estate market in the USA, Los Angeles (California). As the subject of the study, the dynamics of property prices over the last ten years in the real estate market is considered. In the course of the work the following tasks were accomplished: 1. Search for actual data on the price changes in the real estate market in Los Angeles; 2. Checking the time series obtained for stationarity; 3. Construction of ARIMA models for all surveyed districts; 4. Forecasting the dynamics of the value of real estate and the cost of renting real estate for the next ten years; 5. Construction of a graphic model of price dynamics over the past ten years. 6. Construction of a graphic model of price dynamics for the next ten years, based on the model obtained in the previous paragraph. 7. The most effective investment strategy was developed. As a result of the analysis of data on the value of real estate in the market of Los Angeles, it was revealed that the most profitable strategy is to purchase real estate in 2018 and lease it over the period. Based on the data on the cost of rent, it was possible to calculate that real estate in the most expensive district (Hollywood Hills) will fully pay off due to rent in ten years. In districts with an average level of prices a little longer - about fifteen years after the end of the period under review. In the future, the developed investment strategy can be used by investors to obtain the maximum profit from the purchase of real estate.