Property Valuation
A Connecticut appraiser determines that a property has a remaining economic life of 35 years and a current effective age of 15 years. The total economic life estimate is:
A20 years
B35 years
C50 years✓ Correct
D70 years
Explanation
Total economic life = Effective age + Remaining economic life = 15 + 35 = 50 years. Appraisers in Connecticut use standardized methods to estimate property value for lending and sales..
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Key Terms to Know
Comparable Sales (Comps)
Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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.
Gross Rent Multiplier (GRM)A quick valuation metric for income properties calculated by dividing the property price by gross annual rental income.
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