Reference no: EM132356625

Case studies provide complex problem-solving opportunities to real-world challenges by exploring current issues in the relevant field of study.

The case study assessment builds on scenario-based learning throughout the unit and encourages the development of reasoning, problem-solving and decision-making skills.This allows students to learn by doing, as a final step before applying knowledge in professional practice.

Details:
Find an Australian house or apartment that you would like to research. From here on this will bereferred to as a house or property or home regardless of whether it is a house or apartment. The house can be anywhere in Australia so long as you can find enough details about the home and the other variables discussed in the below questions.

You are to undertake an evaluation of the selected property that assesses the financial feasibility of its purchase and subsequent use as a rental property (tenanted, Airbnb or otherwise). Your primary objective is to create as high a return as possible.

Report:
1) Executive summary (150 words)

Summarise the whole report including purchase choice, rationale and evaluation in a succinct manner

2) Introduction (100 words)
Outline the purpose of the report and how using finance theory will assist you in the decision making.

3) Property description (200 words)
State the house's full address and important details such as the price, number of bedrooms and bathrooms, floor space and any other aspects that you think are important. Include a small picture.

4) Rationale for purchase and rental (400 words)
Estimate the home's value based on an average of similar properties that have sold recently. Using a table, set out the details of the other properties and why you think that they're comparable. Outline the major rationale for choosing the property using statistics and macroeconomic data. Explain the environment, market and comparable properties. Explain your strategy for rental including sourcing tenants, market rents and advertising, as well as your rationale for your source of finance.

5) Financial feasibility (350 words and template)

Using a word or excel template (examples will be provided or you mayuse those from the course or develop one of your own), estimate thegross annual rental revenue from leasing the property, the annual rentalcosts including all fee's, repairs, advertising and financing/mortgageexpenses. Estimate the annual growth rate of rents and costs in order toestimate cashflows over a 10 year period. Determine the sale value atthis point and show the NPV, IRR, ARR and payback period using the template. Explain and reference all your calculations and assumptions,for instance mortgage interest calculations and state any formulas that you use. You must explain what the calculations mean and how they impact your decision.

6) Overall conclusions and recommendations (300 words)

Justify your purchase using the financial feasibility and rationale that you have selected. Summarise and explain the risks associated with the decision proposed and how you may mitigate against them.

7) References

Provide a reference list that shows all sources of information. You are expected to use a minimum of 10 sources of information.

Template

Find an Australian house or apartment that you would like to research. From here on this will be referred to as a house or property or home regardless of whether it is a house or apartment. The house can be anywhere in Australia so long as you can find enough details about the home and the other variables discussed in the below questions.

Question 1a: State the house's full address and important details such as the number of bedrooms and bathrooms, floor space and any other aspects that you think are important. Include a small picture.

Question 1b: Estimate the home's value based on an average of no more than 3 similar properties that have sold within the last 2 years. Using a table, set out the details of the other properties and why you think that they're comparable. The table should have at least 5 columns including the addresses, number of bedrooms, floor space, last sale date and price. You can include other columns too if you think they're important. The first row of the table should include the details of the property you're valuing which was stated in Question 1, and the other rows (include a minimum of one other property to compare) should show the details of the other similar properties.

Attachment:- Report Outline.rar