In yield capitalization, what is discounted at a proper yield rate?

Yield capitalization is a method used to value income-producing properties by converting anticipated future cash flows into present value. The correct answer highlights the focus on "the series of future net benefits," which refers to the projected cash flow that the property is expected to generate over time.

In yield capitalization, these future net benefits are discounted to present value using an appropriate yield rate. This process allows investors and assessors to estimate what those future cash flows are worth in today’s terms, accommodating for the time value of money. This approach is essential for making informed investment decisions and accurately determining property value.

While the other options pertain to different aspects of property valuation, they do not encapsulate the fundamental premise of yield capitalization. Cash flows from future expenses are not specifically what yield capitalization seeks to value; instead, the focus is on net benefits after expenses. The market value of the property can be informed by yield capitalization but is not what is directly discounted. Similarly, the total income generated from leases constitutes part of the cash flows but is not the direct basis of the yield capitalization calculation; instead, it’s the net benefit that is considered after all expenses have been deducted. Understanding this distinction is crucial for applying yield capitalization correctly.