Property Valuation
In a Florida appraisal, 'accrued depreciation' is defined as:
AFuture depreciation expected over the remaining economic life
BTotal loss in value from all causes (physical, functional, external) from the time of construction to the appraisal date✓ Correct
CAnnual depreciation for tax purposes under IRS rules
DMarket-driven price reductions
Explanation
Accrued depreciation is the total loss in value from all causes (physical deterioration, functional obsolescence, external obsolescence) from the date of construction to the appraisal date, as used in the cost approach.
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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.
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.
Math Concepts
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