Real Estate
In valuing real estate, a similar approach may be used. The "intrinsic value" of real estate is therefore defined as the net present value of all future net cash flows which are foregone by buying a piece of real estate instead of renting it in perpetuity. These cash flows would include rent, inflation, maintenance and property taxes. This calculation can be done using the Gordon model.
Read more about this topic: Intrinsic Value (finance)
Famous quotes containing the words real and/or estate:
“Man’s real life is happy, chiefly because he is ever expecting that it soon will be so.”
—Edgar Allan Poe (1809–1845)
“Wilt thou have this Woman to thy wedded wife, to live together after God’s ordinance in the holy estate of Matrimony? Wilt thou love her, comfort her, honour, and keep her in sickness and in health; and, forsaking all other, keep thee only unto her, so long as ye both shall live?”
—Book Of Common Prayer, The. Solemnization of Matrimony, “Betrothal,” (1662)