Solar Panels For Homes

There’s sound logic for using internal rate of return (IRR) in a real estate analysis: It considers the aspect of time value of money and therein supports the notion that the timing of receipts from a rental property can be as important as the amount received.

Unlike some other popular returns used by investors to analyze the performance and profitability of rental income properties that don’t account for the time value of money such as capitalization rate and cash on cash, IRR does.

As a result, because it calculates for time value of money and provides a linkage between present value (PV) and future (FV) of any benefit stream, internal rate of return is generally more popular amongst real estate investors than other rates of return.

The idea is straightforward.

Because a dollar in the hand today is preferable to one a year or five years from now, real estate investors want to take into account both the timing and the scale of cash flows generated by the income-producing property to determine what that rental income stream is worth today. Internal rate of return reveals the rate at which future cash flows must be discounted to equal the amount of investment exactly.

How IRR Works

Internal rate of return reveals in mathematical terms what a real estate investor’s initial cash investment will yield based on an expected stream of future cash flows discounted to equal today’s dollars, not tomorrow’s dollars.

Consider this.

When you make a real estate investment, you are investing cash in order to receive a series of future annual cash flows resulting from rental income plus a tidy profit when you sell the property.

The challenge for real estate investors, then, is to discover what rate of return the investor’s initial equity will make based upon those periodic future cash flows at the same time it considers the number of time periods (years) under consideration in the holding period.

The internal rate of return model meets that challenge by creating a single discount rate whereby all future cash flows can be discounted until they equal the investor’s initial investment.

How to Calculate

Calculating IRR manually is not practical because the calculation involves tedious mathematical solutions that take a lot time. Even skilled real estate analysts typically use a financial calculator or real estate investment software program to compute it.

So we’ll ignore the formula and just consider what it signifies.

Let’s assume that you have $300,000 to invest in an income-producing property and plan to hold it for seven years. During those years, you plan on receiving five annual cash flows and then an additional amount from the sale of the property (also known as reversion). When you find the unique rate of return that discounts the sum of all those future cash flows until it equals your initial investment, you will have the internal rate of return.

In other words, it shows you what your cash investment will yield for those cash flow projections based upon today’s value of the dollar, or as if those cash flows were collected today rather then in the future.

You should not, of course, rely on one single element of a real estate analysis to the exclusion of other factors and measurements to make your investment decision. But internal rate of return can help point you in the right direction and guide your purchasing decision so plan to use it.

One final thought. If you are serious about real estate investing, then it is highly recommended that you invest in a real estate investment software solution. In this case, you not only will get a wide range of essential returns that includes IRR, but also benefit from all real estate analysis features that quality investment software provides.

About the Author:

James Kobzeff is the developer of ProAPOD – superior real estate investor software solutions since 2000. Create cash flow, rates of return, and other real estate analysis presentations in minutes.IRR and other returns made automatically! Learn more at => http://www.proapod.com

Article Source: ArticlesBase.com – What Internal Rate of Return Means to a Real Estate Analysis

Excel Finance Trick #3: PMT function Lender or Borrower

A Chinese startup vying for a piece of the U.S. solar market has landed in Eugene, hoping to become a national player in the state’s growing photovoltaic industry. Centron Solar, whose Web site went live Thursday morning, is moving fast to sell and distribute bargain-priced solar panels made in China to the U.S. market, expected to be the world’s next big solar player.  

But the company didn’t even have a name until last month. It leased its Eugene headquarters and 25,000-square-foot warehouse within two weeks. Its first shipment of solar panels, worth $1 million, arrived from China just five days ago. The company, the brainchild of Eugene resident Ocean Yuan, is moving so fast that it caught state economic development officials — and potential competitor SolarWorld — by surprise.  

With a mission to sell solar energy at $1 a watt within a few years, Centron represents the unconventional — and aggressive — tactics of Chinese suppliers, now driving competition in nearly all sectors of manufacturing.   Chinese manufacturers are hungry to enter the U.S., which is expected to follow Europe’s lead in solar energy in the coming years. They are able to produce solar panels at lower costs than Americans or Europeans because of their low wages. And Centron promises that it can beat any price by at least 10 percent. In the solar industry, lowering costs for solar panels has become a race to get to grid parity, the point at which solar can produce power to compete with conventional fossil fuels. It’s typically been pegged at about $1 a watt, though it’s higher in some areas.  

SolarWorld opened the United States’ largest solar plant on a 100-acre Hillsboro campus last fall, putting Oregon on the map. The company, with a strong reputation in the industry, is one of the older solar manufacturers.   Yuan worked his way to becoming the general manager of large Chinese factories making electronic components for companies such as Motorola. After moving to Shenzhen for eight years, he decided he missed the U.S. When the job offer from Solarfun allowed him to relocate, he moved back to Eugene.  

 Bob Warren, business development officer for the state’s Business Oregon in Lane County, said he met with Yuan and some Chinese suppliers several months ago and at the time they had yet to form a concrete plan.  

Centron didn’t ask the state for any tax incentives or grants in their startup, though if they locate a manufacturing facility in Eugene, they could qualify. Already, Centron has given samples of its panels to some installers, including the state’s largest solar contractor and designer Advanced Energy Systems, which is currently testing them.  

About the Author:

China buyer’s agent. China sourcing agent.
http://www.cnbuyersagent.com

Article Source: ArticlesBase.com – Chinese startup based in Eugene wants to sell inexpensive solar panels in U.S

Solar Panels for CHS

Research may shed light on solar cells.(City/Region)(Creating more efficient photovoltaic panels is one aim of a project by UO and OSU scientists): An article from: The Register-Guard (Eugene, OR) $9.95 This digital document is an article from The Register-Guard (Eugene, OR), published by The Register Guard on September 13, 2010. The length of the article is 552 words. The page length shown above is based on a typical 300-word page. The article is delivered in HTML format and is available immediately after purchase. You can view it with any web browser.Citation DetailsTitle: Research may shed lig...