Equity is easy to calculate. Especially now that decent approximations of market value are free of charge online.

I'm finding the task of calculating value based on productivity plus rent collected (or not spent) to be a little more subjective. I am assuming that the value is the sum of all future years productivity and rent. Further, the percent of total that each of those two summands contributes, I suppose, would depend on how the property was purposed.

OK. We need to adjust for many factors, as mentioned in the post. Do we adjust for inflation as well, to find the value in today's dollars? We must assume that the property remains purposed in the same way, and isn't the source of unexpected fabulous wealth or ID'd as a superfund site, etc. My point is, that this calculation has some major assumptions behind it, (but I guess the equity calc based on market value does too)

It's an interesting analysis to play with though. And it adds a level of control over one's own property value, where we have little control over our equity. For example, the idea may prompt a landowner, even in a suburban or urban area, to consider innovative ways to gain productivity or rental income on an existing property. (Hopefully innovative within the law). I believe true RE investors tend to do this manner of analysis at some level whether they are fully aware of it or not.

Your garden variety home owner may lack the sophistication, patience, or motive to run this analysis. As previously observed here and in prior posts, the equity calculation is easy to understand, PLUS it was (and will be again, I'm sure) a great way for many folks to sell all sorts of loan 'products.' Which of course all amount to commitments of future earnings, based on some present market value using the property as collateral.

Will the practice of calculating market value fall away in lieu of this other way to determine value. Ha ha. Come on. the astute will always do both and choose how to assert a value depending on what side of the deal they're on. Mwa ha ha.