A Case Study—Homes

Gary Smith () and Margaret Smith ()
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Gary Smith: Pomona College

Chapter Chapter 8 in The Power of Modern Value Investing, 2023, pp 133-145 from Springer

Abstract: Abstract The Investing 6.0 value-surplus approach can be applied to real estate. If you buy a home and rent it to someone else, the income is the rent you receive (net of expenses). If you live in the house you bought, the implicit income is the money you save by not having to pay rent, net of expenses like home insurance, property taxes, mortgage payments, and maintenance. To make clear the analogy to stocks, we call this net income the “home dividend.” Specific applications of this approach indicate that there was no real-estate bubble in Fishers, Indiana, in 2005 but there was one in China’s two largest cities, Beijing and Shanghai, in 2019.

Date: 2023
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DOI: 10.1007/978-3-031-45900-9_8

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