Question

An appraiser wants to determine if it is economically feasible for the owner of an apartment building to put in a swimming pool for his tenants’ use. The appraiser would be most concerned with the principal of:

Answer 1

Answer:

contribution

Explanation:

the landlord will spend money building the swimming pool, and he/she will do it expecting to receive a higher rent. The appraiser should try to determine if the investment in the swimming pool will contribute enough extra rent to justify making the investment. In other words, does the landlord increase his/her net economic profit by installing the swimming pool?