Investment value is the value of a property to a particular investor. In the U.S. and U.K., it is equal to

market value Market value or OMV (open market valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or '' fair market value'', although t ...

for the investor who has the capacity to put the property to good use—its highest-and-best-use, its most valuable use. For other investors with limited capacity or vision, investment value is lower because they cannot put the property to use in a way that is maximally productive.

International Valuation Standards

The current edition of International Valuation Standards (IVS 2011) defines Investment Value in a way which allows for either a higher value than market value or a lower value than market value: :Investment value - the value of an asset to the owner or a prospective owner for individual investment or operational objectives. Investment Value is a subjective measure of value, a 'value-in-use', whilst

Market Value Market value or OMV (open market valuation) is the price at which an asset would trade in a competitive auction setting. Market value is often used interchangeably with ''open market value'', ''fair value'' or '' fair market value'', although t ...

is an objective 'value-in-exchange'. As defined in IVS2, Investment Value is the valuation equivalent of the

accountancy Accounting, also known as accountancy, is the process of recording and processing information about economic entities, such as businesses and corporations. Accounting measures the results of an organization's economic activities and conveys ...

concept of

Value-in-use Value-in-use is the net present value (NPV) of a cash flow or other benefits that an asset generates for a specific owner under a specific use. In the U.S., it is generally estimated at a use which is less than highest-and-best use, and therefor ...

. Whereas

IFRS International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's fina ...

s define the accountancy concepts of

fair value In accounting, fair value is a rational and unbiased estimate of the potential market price of a good, service, or asset. The derivation takes into account such objective factors as the costs associated with production or replacement, market c ...

and Value-in-use in operational terms, IVSs define Market Value and Investment Value by way of generalised definitions.

References

{{DEFAULTSORT:Investment Value Real estate valuation Valuation (finance) Real estate investing