The principle of anticipation holds that value is created by:

Correct Answer

D) The expectation of future benefits from ownership

Why this is correct: The principle of anticipation states that value is based on the present worth of the future benefits (income, utility, etc.) expected to be received from owning the property. This is the core concept behind the income approach to value. Why the other choices are wrong: 'The physical durability of the improvements' relates to physical life, not value creation. 'The historical cost of originally creating the property' is the cost approach principle. 'The current owner's original purchase price' is historical and may not reflect current or future value. Exam tip: Value today = Future benefits discounted to present. This is the heart of appraisal theory.