167k views
1 vote
What principle of value states that if the increase in the value of the real estate is more than the cost to renovate, the sellers would financially benefit by doing the renovation?

1 Answer

3 votes

Answer: Principle of contribution

Step-by-step explanation:

The principle of value states that if the increase in the value of the real estate is more than the cost to renovate, the sellers would financially benefit by doing the renovation is referred to as the principle of contribution.

According to the principle of contribution, the worth of an improvement of a property has to do with its addition or contribution the the property's market value and not the cost of the improvement done.