Property Valuation
In Colorado, the 'economic life' of an improvement refers to:
AA. How long the building will physically stand
BB. The period during which improvements contribute positively to the property's value — when they are economically productive✓ Correct
CC. The period until the next property tax assessment
DD. The building's depreciation for tax purposes
Explanation
Economic life is the period during which an improvement contributes positively to the property's total value — the period it is economically productive. It differs from physical life (how long it will stand). An economically obsolete building may still be physically sound but no longer contribute to value. Economic life is used to calculate depreciation in the cost approach.
Related Colorado Property Valuation Questions
- Colorado's 'Board of Assessment Appeals' (BAA) hears property valuation disputes when:
- When performing a sales comparison approach, an appraiser adjusts for differences between the subject property and comparables. If a comparable has a feature the subject lacks, the appraiser should:
- When a Colorado appraiser makes a 'downward adjustment' to a comparable, it means:
- A Colorado appraiser is asked to provide a 'restricted appraisal report.' This type of report:
- An appraiser in Colorado finds only two sales of similar properties in the past 6 months. To find more comparables, the appraiser might:
- An appraiser in Colorado is preparing an appraisal for a property in a 'transitional neighborhood' (changing from residential to commercial). The highest and best use analysis should:
- The principle of 'highest and best use' in Colorado appraisal means:
- A Colorado real estate broker preparing a 'Comparative Market Analysis' (CMA) for a seller should:
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