Property Valuation
In Alaska, the 'economic life' of a building refers to:
AThe number of years since the structure was built
BThe period over which improvements contribute to the property's value✓ Correct
CThe remaining mortgage term on the property
DThe time before building codes require major renovation
Explanation
Economic life is the estimated period over which a building's improvements contribute positively to the total property value. It is the basis for straight-line depreciation calculations in the cost approach. Economic life ends when the improvements no longer add value (when land value alone is greater than land plus improvements).
Related Alaska Property Valuation Questions
- An Alaskan property with an NOI of $75,000 is valued at $1,000,000. The overall capitalization rate is:
- Under the income approach, effective gross income (EGI) is calculated as:
- External obsolescence affecting a property's value is caused by:
- In Alaska, the cost approach to value is MOST useful when appraising:
- When a licensed appraiser estimates the value of a property, the appraiser is providing an opinion of:
- External (economic) obsolescence affecting Alaska property values might be caused by:
- An Alaska appraiser is determining the value of a property in a remote area with no comparable sales. Which approach would likely be MOST useful?
- In Alaska, economic life of a building refers to:
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