The market value of real estate is determined by the incoming and outgoing cash flows expected in the future. Incoming cash flows mainly comprise of rental income (excl. ancillary costs, incl. the risk of income loss). Outgoing cash flows encompass the operating and maintenance costs paid by the owner. The difference between incoming and outgoing cash flows yields the net income, which is discounted at a risk-adjusted interest rate. It does not take borrowed capital payment, taxes on earnings and capital gains or depreciation and amortisation into account.
German: Discounted Cashflow-Methode (DCF) (267)
Source: SFO D15 2010 m. e. E., 24.04.2010