Net present value of real estate sales over 15 years

by Bob Johnson
(Alpharetta, Ga)

If I have 20 lot sales a year for 15 years at a starting price of $200,000 what is the net present value of those sales in the first year?

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Oct 25, 2022
 NPV of Real Estate Sales Over 15 Years
by: Dee

The answer to your question depends on the discount rate being used. The default interest rate on the NPV Calculator on this site is 10%. That is what what I will use for this question.

I would put a zero in the initial investment and 20x200,000 in each of the first 15 year rows. The NPV is shown at the bottom at $30,424,220.

This of course is not very meaningful unless you are comparing it another potential project. Maybe you have a project that will sell 15 lots per year for 20 years. The one with the highest NPV would be the one that is the most profitable. That is the one that you would choice.

Finding the net present value is a tool for making decisions, not for having a number to look at and admire.

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