38 FOREST VALUATION 



his total net profit, while the purchaser is saddled with a cost or 

 investment which forms the opening entry in a similar account, 

 and no future acts will serve to reduce this initial cost. 



60. Appraisal of Value ( 18). In determining the true value 

 of assets, either as a guide to the owners in negotiating a sale, 

 or for compensation for damages or in condemnation pro- 

 ceedings, the appraiser bases his opinion upon the most reliable 

 sources of information at hand. If a basis for sales is sought, 

 the average sale value of similar property in the immediate 

 past is given most weight. But where the owner does not 

 desire to sell, the appraiser must seek to establish the value 

 to the owner if the property remains in his possession, and this 

 rests wholly on its usefulness to him, not on what someone else 

 would pay for it. 



61. Future Income as the Basis of Value. The only true 

 basis of value recognized by economists is income (4, 26). 

 When a sale of property occurs, the "income" from the sale 

 should coincide with the value of the property. The value 

 which the owner or purchaser places on the property is deter- 

 mined by the value of all the future income which he expects to 

 derive from it. 



In explaining values on this basis the true nature of income 

 must be kept in mind. " Final" income takes the form of 

 actual enjoyment of the uses or services of possessions. Real 

 estate is valuable to an owner, not merely for its money income, 

 but for the personal enjoyment which he gets from the rights 

 of possession. In this must be included the associations and 

 neighborhood of which it makes him a part. The sentiment 

 attached to the retention of an inherited homestead, the prej- 

 udice against leaving surroundings grown familiar by long resi- 

 dence will, by contributing to the peace of mind of the owner, 

 enhance the value of his land in his opinion in a manner fully 

 as concrete as money income. Only poverty or actual want 

 will counterbalance these very real values. This element of 

 social income must never be lost sight of in the valuation of 

 property. But the appraisal of income must ordinarily be based 

 upon money returns which can reasonably be expected in the 



