Which economic principle relates to the highest and best use of a property?

The principle that relates to the highest and best use of a property is anticipation. This principle suggests that the value of a property is strongly influenced by the expected future benefits that it can provide. When determining the highest and best use, appraisers and real estate professionals consider how the property can be utilized to generate the most value over time, taking into account factors such as location, market trends, and potential future developments.

In recognizing the highest and best use of a property, anticipation plays a critical role in assessing how the current use aligns with future demand and investment potential. For example, a vacant lot in a growing urban area may have a higher value if it is developed into residential apartments than if it remains underutilized.

Understanding this principle emphasizes the importance of forward-thinking in real estate investment and development, where anticipating future market conditions can significantly enhance property value and usability.