Just as the price of a share should equal the discounted present value of future profits, so the price of a house should reflect the future benefits of ownership either rental income or the implicit rent saved by an owner-occupier.
Just as the price of a share should equal the discounted present value of future dividends, so the price of a house should reflect the future benefits ofownership, either as rental income for an investor or the rent saved by an owner-occupier.
Just as the value of a company's shares should equal the discounted present value of its future profits, so the price of a house should reflect the future benefits ofownership, either as rental income or in the rent saved by an owner-occupier.