Going Concern Value
The total value of an established operating business and the real estate it occupies — real property, tangible personal property, and intangible business value combined. Hotels, gas stations, and care facilities are typically bought and sold as going concerns.
Related Terms
Investment Value
The value of a property to a particular investor based on that investor's own requirements — financing, tax position, yield expectations — as distinct from market value, which reflects the typical participant.
Income Approach
A valuation method that estimates a property's value based on the income it generates or is expected to generate.
Personal Property
Movable items not permanently affixed to the real estate — furniture, appliances not built in, equipment.
More in Income Approach
View allCapitalization Rate (Cap Rate)
Cap RateThe ratio of a property's net operating income to its market value or sale price, expressed as a percentage.
Gross Rent Multiplier (GRM)
GRMThe ratio of a property's sale price to its gross monthly (or annual) rental income.
Net Operating Income (NOI)
NOIThe annual income remaining after deducting all operating expenses from effective gross income, but before deducting debt service (mortgage payments) and income taxes.
Effective Gross Income (EGI)
EGIPotential gross income minus vacancy and collection losses, plus other income (laundry, parking, late fees).