principle of anticipation

anticipation, principle of

In appraisal, the concept that the value of property today is equal to the value of future income, discounted to present value. Discounting rests on the assumption that the right to receive $1 in the future is not worth $1 today, but something less than $1.

References in periodicals archive ?
A cap rate in its simplest form is a return on your investment based on the principle of anticipation.
Failure to consider the likely future income of the property (year one pro forma) does not follow the principle of anticipation.
ANTICIPATION: The building blocks of a successful negotiation ultimately come down to the principle of anticipation.
Principle of anticipation is the perception that value is created by the expectation of benefits to be derived in the future.
An example of a reasoning process in appraisal with an adequate principle is income analysis, in which the principle of anticipation (i.
The foundations of appraisal include three other principles: the principle of anticipation, the principle of change, and the principle of conformity.
The principle of change, the principle of supply and demand, the principle of substitution, the principle of balance, and the principle of externalities also premise aspects of the income approach, according to The Appraisal of Real Estate,(21) but none states or implies anything as fundamental about the pricing logic of the income approach as the principle of anticipation does.
Likewise, individuals do not always: (a) set price exactly equal to the purchase prices of properties with equal utility, as in the principle of substitution, and (b) individuals do not always set price exactly equal to the present worth of anticipated future benefits, as in the principle of anticipation.
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