Which concept represents the idea that value is maximized when property improvements and land are proportional?

The concept of "Balance" in real estate refers to the principle that a property's highest value is achieved when there is an appropriate relationship between the land and the improvements made to it. This principle suggests that over-improving a property in relation to the land or under-improving it can lead to a decrease in overall value.

For example, if a small piece of land has an excessively large and elaborate structure built on it, the value may not reflect the investment made in improvements because the improvements are disproportionate to the land size. Conversely, if the land is well-developed with appropriate improvements, it enhances the overall market appeal and value.

Understanding this principle is essential for real estate professionals, as it guides decisions in development and investment, ensuring that properties are improved in a manner that maximizes their market value.