Property Valuation
In the cost approach, economic life refers to:
AThe age of the building since construction
BThe total period over which a building is expected to generate income or serve its purpose✓ Correct
CThe remaining mortgage term
DThe time period covered by the appraisal
Explanation
Economic life is the total period during which a building can be expected to generate income or serve its intended purpose competitively.
Related Alabama Property Valuation Questions
- In the sales comparison approach, the subject property is compared to which of the following?
- Net operating income minus debt service equals:
- A residential property's square footage of gross living area (GLA) is measured:
- An appraisal that understates value is called:
- What is the indicated value of a property with an annual NOI of $36,000 and a capitalization rate of 7.5%?
- A property's stabilized NOI is $78,000. If the cap rate is 7.5%, what is the indicated value?
- Which of the following statements about land value is TRUE?
- Functional obsolescence due to a feature that costs more to cure than the value it adds to the property is called:
Practice More Alabama Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Alabama Quiz →