Property Valuation
The principle of anticipation in real estate valuation holds that value is created by:
AWhat a property produced in the past
BWhat the property currently earns
CThe expectation of future benefits (income, amenities, or appreciation)✓ Correct
DThe cost of reproduction of the improvements
Explanation
The principle of anticipation states that value is created by the expectation of future benefits—whether income, amenities, or appreciation. This principle underlies the income approach (which capitalizes expected future income) and explains why improving neighborhoods command premium prices based on anticipated future conditions.
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