What term refers to the amount of market value added to a property by an addition or improvement?

The term that refers to the amount of market value added to a property by an addition or improvement is "Contribution." This principle of value indicates that the value of an improvement should be assessed based on how much it adds to the overall worth of the property, rather than just the costs associated with the improvement itself. In real estate, when an enhancement is made to a property, such as adding a room or renovating a space, the increase in market value should ideally reflect that investment.

When evaluating property improvements, it’s important to consider not just the money spent but the actual market response – meaning, does the market recognize and respond positively to that improvement? This measurable increase in value as a result of such additions is fundamental to property appraisal and investment decisions.

The other choices do not pertain directly to the increase in market value from improvements. Conventional loans refer to a standard mortgage not insured by the government; conversion typically involves changing the use of a property; and corrective maintenance involves repairs to address issues but does not enhance the market value.