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Real Estate Glossary

Discounted Cash Flow Analysis (DCF)

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Written by Luis Escobar

A discounted cash flow (DCF) analysis suggests that the value of a property is equal to its expected future cash flows discounted to present dollars. DCF analysis believes in the principle that an investment now is worth an amount equal to the sum of all the future cash flows it will produce. Furthermore, each of those cash flows is being discounted to their present value.

A discounted cash flow (DCF) analysis suggests that the value of a property is equal to its expected future cash flows discounted to present dollars. DCF analysis believes in the principle that an investment now is worth an amount equal to the sum of all the future cash flows it will produce. Furthermore, each of those cash flows is being discounted to their present value.

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Luis Escobar

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