What is the term for the potential increase in value due to improvements made to a property?

The term that most accurately describes the potential increase in value as a result of improvements made to a property is "Contribution." This concept refers to the value added to a property by specific enhancements or upgrades, which is based on the principle that not all improvements will yield the same increase in property value.

The value of the contribution is assessed in relation to how much that particular improvement adds to the overall worth of the property. For instance, if a homeowner adds a new bathroom or remodels the kitchen, the increase in the property’s market value is evaluated based on the improvement's contribution to overall value.

This concept is distinct from appreciation, which refers to the general increase in property value over time due to market factors rather than specific improvements. Similarly, enhancement suggests a more qualitative aspect of the property without the specific quantitative contribution to its value. Capitalization, on the other hand, relates to the process of converting future income generated by a property into its current value, but it does not directly address the value added through improvements. Thus, "Contribution" precisely captures the dynamics of how improvements can lead to increased property value.