Personalised property investment risk analysis model in the real estate industry

Abstract

Property investment in the real estate industry entails high cost and high risk, but provides high yield for return on investment. Risk factors in the real estate industry are mostly uncertain and change dynamically with the surrounding developments. There are many existing risk analysis tools or techniques that help investors to find better solutions. Most techniques available refer to expert's opinions in ranking and weighting the risk factors. As a result, they create misinterpretation and varying judgments from the experts. In addition, investment purposes differ between investors for both commercial and residential properties. There is therefore a need for personalisation elements to enable investors to interact with the analysis. This chapter presents a personalised risk analysis model that enables investors to analyse the risk of their property investments and make correct decisions. The model has three main components: investor, decision support technologies, and the data. Real world data from the Australian real estate industry is used to validate the proposed model. © 2014 Springer-Verlag Berlin Heidelberg.