{"id":6876,"date":"2018-02-22T05:35:59","date_gmt":"2018-02-22T05:35:59","guid":{"rendered":"http:\/\/www.realestatewords.com\/?page_id=6876"},"modified":"2021-11-03T20:11:03","modified_gmt":"2021-11-03T20:11:03","slug":"principle-of-anticipation","status":"publish","type":"page","link":"https:\/\/www.realestatewords.com\/principle-of-anticipation\/","title":{"rendered":"Principle Of Anticipation"},"content":{"rendered":"

Principle of Anticipation Definition<\/h2>\n

Principle of Anticipation<\/strong> is the idea that the property\u2019s market value is the present value of the sum of anticipated future benefits.<\/p>\n

Explanation<\/h2>\n

A very simple example is that a buyer agrees to pay a certain price for a rental property, based on that buyer\u2019s calculations of the rental income that the property can bring during a certain time period. This property appraisal method based on the principle of anticipation is known as Income Approach<\/a>.<\/p>\n

Another simple example would be a vintner who is making an offer on a vacant land because he sees that it\u2019s located in an area where the climate and water supply are perfect to develop a vineyard. The vintner is anticipating a return in the future, that is greater than he\/she could experience by simply buying and holding a vacant piece of land.<\/p>\n

It\u2019s also important to realize that the principle of anticipation doesn\u2019t always refer to monetary gain. It could also be emotional or mental gain.<\/p>\n