In real estate, "intrinsic value" refers to the inherent worth of a property based on its fundamental characteristics, independent of market conditions or external factors such as current supply and demand. It's the underlying, long-term value of the property, considering its essential attributes like location, utility and potential for future income or use. Intrinsic value is a key concept in property investment and appraisal, especially when considering a property's long-term prospects rather than its short-term market price.
Unlike market value, which is determined by what buyers are currently willing to pay, intrinsic value focuses on what the property is worth based on its enduring qualities. When making decisions, investors and appraisers often consider intrinsic value to evaluate whether a property is priced above or below its true worth.