Intrinsic Value in Investment Properties

There exists in all investments an intrinsic value of some kind. This value is a dollar amount, and it is what the investment is “really” worth. The investment may not be worth this amount at any given time because of market conditions, but it does still have this intrinsic value. The intrinsic value is based off of facts, not opinions. It is based off of quantitative information, not qualitative. When we examine a piece of stock, we calculate the intrinsic value based on the amount of assets a company owns minus the debt against it. What is leftover is divided by the number of shares, and each share then has its intrinsic value. Another approach for determining the value of stock is the excess of expected earnings and dividends for a period of years above a normal interest return. To determine the intrinsic value of a piece of property, we can multiply its monthly income by one hundred. This will give us a number to work with.