Physical deterioration that can be economically repaired is called:
Why Curable physical deterioration Is Correct
Answer B: Curable physical deterioration
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
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Related Alabama Questions
- The cost approach to value in Alabama is best used for:Property Valuation
- Which appraisal approach involves estimating the value of a property by calculating the cost to reproduce or replace the improvements plus the land value?Property Valuation
- An appraiser determines a property's value by the cost to replace it, minus depreciation, plus land value. This is the:Property Valuation
- Functional obsolescence due to a feature that costs more to cure than the value it adds to the property is called:Property Valuation
Key Terms to Know
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
AppraisalA professional estimate of a property's market value prepared by a licensed or certified appraiser.
Capitalization Rate (Cap Rate)A rate used to estimate the value of income-producing property, calculated as Net Operating Income divided by property value.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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