Property Valuation
External obsolescence (economic obsolescence) in a Colorado property is best described as:
APhysical deterioration from deferred maintenance
BOutmoded features within the property such as an outdated floor plan
CLoss in value caused by forces outside the property, such as nearby industrial development✓ Correct
DDepreciation calculated for federal income tax purposes
Explanation
External (economic) obsolescence is caused by factors outside the property and is typically incurable. Examples include proximity to a landfill, airport noise, economic decline in the neighborhood, or oversupply in the market.
People Also Study
Related Colorado Questions
- Economic obsolescence (external obsolescence) in appraisal refers to loss in value caused by:Property Valuation
- Under Colorado property tax assessment, residential properties are assessed at what percentage of actual (market) value?Property Valuation
- The economic life of an improvement in a Colorado appraisal refers to:Property Valuation
- The 'market value' of a property in Colorado is best defined as:Property Valuation
Key Terms to Know
Depreciation
A reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
Net Operating Income (NOI)The annual income generated by an income-producing property after subtracting operating expenses, but before debt service.
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.
Math Concepts
Study This Topic
Practice More Colorado Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Colorado Quiz →