Property Valuation
Which of the following BEST describes 'effective age' in appraisal?
AThe number of years since the structure was built
BThe age indicated by the condition and utility of the structure, which may differ from chronological age✓ Correct
CThe number of years remaining on the depreciation schedule
DThe age of the original foundation
Explanation
Effective age reflects the condition and utility of a building — a well-maintained 40-year-old structure may have an effective age of 20 years, while a poorly maintained 10-year-old structure may have an effective age of 25 years. Effective age differs from chronological (actual) age.
Related Alaska Property Valuation Questions
- An Alaska appraiser finds that a property's 'as-if-complete' value assumes:
- In Alaska real estate practice, a broker price opinion (BPO) differs from an appraisal primarily because:
- An Alaskan appraiser estimates that a property suffers from $15,000 in physical depreciation, $8,000 in functional obsolescence, and $5,000 in external obsolescence. Total depreciation is:
- Market value in an appraisal is defined as:
- The capitalization rate (cap rate) is calculated as:
- An Alaska property has a GPI of $150,000, a 5% vacancy rate, and operating expenses of $55,000. What is the NOI?
- When valuing an income property, the overall capitalization rate (OAR) is derived from:
- In Alaska, a property's effective age may be less than its actual age if:
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