Value
DCF method (discounted cash flow)
Valuation based on future cash flows.
The DCF method discounts a property's expected future rental income and terminal value to a net present value. This method is mainly used for more complex properties with fluctuating rental income.
See also
Commercial property valuationFrequently asked questions about DCF method (discounted cash flow)
What does DCF method (discounted cash flow) mean?
Valuation based on future cash flows.
How does DCF method (discounted cash flow) work in commercial real estate?
The DCF method discounts a property's expected future rental income and terminal value to a net present value. This method is mainly used for more complex properties with fluctuating rental income.
Related terms in value
Gross initial yield
Gross rent divided by the investment.
Net initial yield
Yield after deducting the owner's expenses.
Commercial property valuation
Formal valuation by a valuer.
Rental capitalisation method
Valuation method based on rental income.
Letting potential
The extent to which a property can be let quickly and at a market rent.
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