Imputed rent

Imputed rent is the economic theory of imputation applied to real estate: that the value of a good is more a matter what the buyer is willing to pay than the cost the seller incurs to create it. In this case, market rents are used to estimate the value to the property owner. Thus, for example, if one could rent a similar property for less than the costs, one is losing money on the deal and vice versa. While the idea of imputed rent applies to any capital good, it is most commonly used in reference to home ownership.