Money, wealth, and income are easy to understand by anyone who thinks. If I own property then I have wealth but no income or money. If I get a loan using the property as collateral, then I have money, and I have income when I rent out the property. Seems that a lot of people don't think though.
However a major problem comes up when we talk about "value" AKA "worth".
Do we say the value of a piece of property is the latest bid price, the asking price, or the last transaction price? Worse yet is the case where some property produces an income of say, $10k per month, but the latest bid/ask/transaction prices were just $5k for the whole thing. I'd argue that with this kind of situation that market prices just don't make sense, but I'm stuck for a good alternative.
The good alternative is well known, it is the discounted present value of the future cash flows the asset will generate. If you know those likely future cash flows and can put a reasonable interest rate on it, one that reflects your own time preference for savings and takes into account alternate investments available in the market, then the fair price is just that DPV. If the cash flows will continue indefinitely without change, that means you just divide by the interest rate. E.g. 10 times rent means a 10% rate of discount if you will get that amount forever. If it will rise a few percent a year, that is effectively added to the return.
Market prices are *not* an adequate guide to the value of things. This is particularly true when interest rates are far from the level you expect to see over the lifetime of the asset. One of the problems in bubbles is you see people capitalizing at 4% interest rates, properties that will have to produce income for 25 or 30 years, when the actual interest rate on alternate investments will *not* stay that low for such an extended period.
Fair question.