What principle explains that property value is influenced by expected future benefits?

The principle that explains how property value is influenced by expected future benefits is known as the Economic principle of Anticipation. This principle is rooted in the idea that the current value of an asset is partly determined by the benefits that a buyer expects to receive in the future. In real estate, this means that prospective buyers will evaluate a property not just based on its current condition or attributes, but also on how they foresee its usefulness and value growing over time, such as potential income generation from rental or appreciation in value.

This anticipatory factor plays a crucial role in property valuation as it helps assess the desirability and, consequently, the price someone would be willing to pay. The expectations about future benefits might include economic trends, neighborhood developments, or investment opportunities that could enhance the property's value.

In contrast, the other economic principles listed address different aspects of value assessment. The principle of Competition relates to how the market competes among similar properties, affecting pricing based on supply and demand dynamics. The principle of Contribution focuses on how each component of a property contributes to its overall value. Lastly, the principle of Substitution emphasizes that a buyer will not pay more for a property than what it would cost to acquire an equally desirable substitute. Each of these principles plays a