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:
“A man’s real life is that accorded to him in the thoughts of other men by reason of respect or natural love.”
—Joseph Conrad (1857–1924)
“Not a flock of wild geese cackles over our town, but it to some extent unsettles the value of real estate here, and, if I were a broker, I should probably take that disturbance into account.”
—Henry David Thoreau (1817–1862)