When the ground rent capitalization method is used, a capitalization rate is applied to ______ in order to arrive at a value.

The ground rent capitalization method focuses on the income generated from a property, specifically the annual income derived from ground rent. This method is particularly relevant in assessing properties that are leased to tenants who pay rent, reflecting the income stream that the property owner can expect to receive.

By applying a capitalization rate to the amount of yearly income, appraisers can convert that anticipated income into a present value estimate. The capitalization rate represents the expected rate of return on an investment, allowing for a standardized approach to evaluate the property's worth based on its income potential. Thus, utilizing the expected annual income in the formula provides a reliable means to estimate the value of the property associated with ground rent, aligning the appraised value with the income-producing capability of the property.