What does the 'Safe rate' in real estate investment summation concept refer to?

The 'Safe rate' in the context of real estate investment summation refers to the minimal risk return rate, often associated with the returns on low-risk investments. This concept provides a baseline for evaluating the attractiveness of riskier investments, such as real estate. In investment analysis, particularly in the discounted cash flow method, the safe rate serves as a benchmark for determining the minimum expected return on investments without taking on substantial risk. Investors typically use this rate as a starting point when weighting the potential returns of different investment opportunities, effectively gauging whether the higher returns from riskier ventures adequately compensate for the increased risks taken. By using the safe rate in this way, investors can make more informed decisions about asset allocation and risk management in their investment portfolios.