The concept of 'utility' in property valuation primarily refers to what?

The correct answer is that 'utility' in property valuation refers to the economic potential of a property. In the context of property appraisal, utility pertains to the usefulness or value that a property provides to its users or occupants. This concept plays a significant role in determining how a property can generate income or serve specific needs for its owner or tenants.

Utility encompasses various factors, including location, size, functionality, and adaptability of the property to meet current or future demands. A property with high utility is likely to attract buyers or tenants, thereby enhancing its market value. The economic potential is closely tied to how well the property can satisfy the needs of its users, which directly influences its desirability and market performance.

While other options touch upon important aspects of property valuation, they do not capture the essence of 'utility' as effectively as the focus on economic potential does. For instance, physical condition pertains more to the state of the property itself rather than its economic function. Legal definitions of property rights address ownership and regulatory aspects, while aesthetic appeal is subjective and more related to personal preferences rather than economic advantages.