The effective age of a building refers to:
Why The age the building appears to be based on its condition and maintenance Is Correct
Answer C: The age the building appears to be based on its condition and maintenance
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 California Questions
- The 'effective age' of a building used in appraisal is best defined as:Property Valuation
- The Uniform Standards of Professional Appraisal Practice (USPAP) are developed and maintained by:Property Valuation
- When using the age-life method to estimate accrued depreciation, the depreciation percentage is calculated by dividing effective age by:Property Valuation
- An appraiser is using the cost approach to value a 10-year-old building. The replacement cost new is $400,000 and the building has experienced 25% total depreciation. The land is valued at $120,000. What is the indicated value?Property Valuation
Key Terms to Know
A 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.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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