The discounted cash flow model for property valuations: quarterly cash flows

Abstract

Purpose

There are three approaches to valuation: cost, market and income. As a subset to the income approach, the investment method looks at the pricing of assets that produce income over an investment holding period. The discounted cash flow (DCF) technique or model can be developed to look at the cash flows on a quarterly basis to reflect the actual receipt of the cash flows. The aim of this paper is to give an overview of the DCF quarterly model.

Design/methodology/approach

This education briefing is an overview of the DCF quarterly model.

Findings

The DCF quarterly model can be seen to produce estimates of market value.

Practical implications

As the use of DCF is developed and expanded, it is useful to be able to model the cash flows appropriately.

Originality/value

This is a review of existing models.

Citation

French, N. (2013), "The discounted cash flow model for property valuations: quarterly cash flows", Journal of Property Investment & Finance, Vol. 31 No. 2, pp. 208-212. https://doi.org/10.1108/14635781311302618