Talk:Investment value

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International Valuation Standards[edit]

IVS 2007, the 8th edition of International Valuation Standards, has been published: see here. So I think this entry, as well as the one on Value-in-use should refer to the final version IVS 2, and not to any draft copy. If anyone has access to these, it would be helpful to supply the definitions contained therein.Tkeu (talk) 18:08, 24 November 2007 (UTC)[reply]

Investment Value[edit]

What? "In the U.S., it is greater than market value because the investor is able to put the property to a use which is greater than its highest-and-best-use." That's not right! I see an oxymoron here.

How can an investor put the property to use in a manner which is more productive / useful / valuable than Highest & Best Use, which is legally allowable, physically possible, financially feasible, and maximally productive? Does the investor get special dispensation from the courts of law, the laws of physics, the realities of the financial marketplace to find a more productive use for a property? I doubt it.

Investment value reflects the investor's personal preferences and resources; perhaps I don't have the resources to develop a large project, but I can develop a more modest project on a given parcel when both are permissable, possible, feasible and productive. In that case, investment value to me is less than it could be to an investor with greater financial capacity.

On the other hand, I may have a bright idea which puts a property to use in a lawful, possible, feasible and much more productive use than can be found by other investors. Perhaps I see a way to re-zone the property when others think it unfeasible to attempt a re-zoning effort. If I'm right, then I properly identified the highest & best use of the land; the others underestimated its potential. My conclusion fits the definition of market value and I properly perceived the present highest & best use of the property.

In 30+ years of professional experience as a real estate counselor, I find the smart investors perceive value where others do not. Their opinion of investment value is subject to the same constraints the concept of highest & best use imposes on others. Market value reflects the highest investment value perceived by participants in the marketplace. //Don K. (talk) 13:29, 6 October 2008 (UTC)[reply]

As an additional point, if we were to take literally the article's claim that investment value is always less than or equal to Market Value, no trades would ever take place. For the buyer, investment value is greater than or equal to Market Value. If the buyer's perception of investment value were lower than market value, he would not buy. Similarly, for the seller, investment value is less than or equal to Market Value. If it were higher, the seller would not sell.

Also, the fact that only one buyer will end up with the asset does not preclude there being multiple potential buyers whose perceived investment value exceed Market Value. For the unsuccessful buyers, either their perceived investment value fell between Market Value and the investment value of the winning buyer, their negotiation strategy was inferior to that of the winning buyer, or the seller believed their likelihood of closing was less than that of the winning buyer.Brutter (talk) 03:18, 15 September 2010 (UTC)[reply]