One of the diversified organizations that provide online higher education for military and the public service communities is the American Public Education Inc. It is comprised of the American Military University and the American Public University. It provides affordable online education for students who pursue military studies and intelligence, homeland security, criminal justice, technology, business administration, liberal arts and public health.
The organization is looking to invest in long- term projects that will ensure stable payoffs with minimal risks. For them to be successful, they need to consider various investment strategies before making their decision (Hagstrom, 2010). The use of proper capital finance and budgeting heightens the success of organizations since they have increased chances of growth with minimal losses. They will need to study the diversity of their portfolio and work towards its strengths. After an evaluation of other alternatives, they should make sure that the cash receipts are higher than the expenditure.
They should consider the venture with the expectation of long-term returns. The planning of the projects should include a SWOT analysis of the venture, highlighting the strengths, weaknesses and the opportunities and threats involved in the decision to invest in real estate. They should evaluate their financing plans and ensure that the risks do not exceed payoffs, in order to have an effective debt management plan (Peter L Bernstein, 1998).
Real estate investing is the purchasing, management or ownership of real property for profit, for sale or rent. It is a capital intensive with high- return cash flows over the short and long terms. It is recommendable for the stakeholders who are looking for long time ventures.
Investing in real estate for a university has the potential to yield high payoffs in the long- run with minimal risks of losses (Riley, 2010). The recommended strategy for the universities is the ‘buy and hold’ investment strategy, because of the concept that long- run equity gives a good return.
The risks involved are from the fact that the real estate markets are not as organized as other liquid instruments. Locating property to invest in is a major challenge, and there are transactional risks. Thorough inspections are necessary to ensure the worth of the venture is real to reduce losses due to the risk from the uncertainty to appreciate the risk. Fluctuations in prices are also a substantial risk factor to consider before investing in the real estate. Diversity in the portfolio and the use of professional real estate managers eliminate most of the threats posed by the risks.
The returns from the real estate would benefit the university in various ways. The investments double in value over long-term periods since they have an appreciating nature. The university can acquire property at current market values and with minimal changes gain the ability to increase its value.
The university can benefit from renting out the property in time before it has matured for sale. It can also expand some of the activities using the property e.g. land and buildings to increase the student numbers and earn more money from tuition. The decisions they make during (Edwin J. Elton, 2009)is the determinant of the returns that the investment will yield. They should build a strong portfolio with different strengths in location, age and yield.
References
Edwin J. Elton, M. J. (2009). Modern Portfolio Theory and Investment Analysis. Hoboken: John Wiley and Sons.
Hagstrom, R. G. (2010). The Warren Buffett Way. New York: John Wiley and Sons.
Peter L Bernstein, A. D. (1998). Investment Management. New York: John Wiley and Sons, 199.
Riley, R. (2010). Real Estate. New York: Infobase Publishing.