Intrinsic Value of a rental property

2 Replies

Is there a way to know the intrinsic value of a house?

House prices have been going up in several places and investors can't really get in to earn meaningful returns. However, prices could also be going up because of a genuinely strong market like jobs and salary growths.

What metrics should I consider to determine if a market is overpriced or priced appropriately?

This is very good question Rahul. I think you can approach it by trying to understand the cap rate prior to covid and post covid era. Obviously, the intrinsic value doesn't increase much but market forces is bringing up the price due to more money supply combined with cheap money in public market, so house is being used now as inflation hedging tools.

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