Dictionary of Real Estate Terms: anticipation, principle of
anticipation, principle of
in the appraisal of real estate, the principle that the value of property today is the present value of the sum of anticipated future benefits.
Example: A commercial property is net-leased to a triple-a tenant for $10,000 per year for 30 years. At the end of that time the building will be worthless. The anticipated benefit of $10,000 per year for 30 years at a 10% discount rate is $94,269. This value is based on the principle of anticipation, because the income is expected to be received in the future.
