Property Valuation
In Louisiana, 'economic life' of an improvement in appraisal refers to:
AThe number of years the building has existed
BThe period over which improvements contribute to the value of the property (i.e., the period during which they are economically beneficial)✓ Correct
CThe remaining physical life before the structure collapses
DThe depreciation period for tax purposes
Explanation
Economic life is the period over which improvements to land contribute positively to the property's value — when the improvements generate more income than the cost to maintain them. It is generally less than the physical or tax depreciation life.
Related Louisiana Property Valuation Questions
- What does 'as-is' value mean in a Louisiana appraisal?
- The principle of 'substitution' in real estate appraisal states that:
- The 'land residual technique' in Louisiana income property appraisal determines land value by:
- What does 'physical deterioration' mean as a form of depreciation in real estate?
- Which of the following is an example of economic (external) obsolescence in a New Orleans property?
- The 'reconciliation' step in a Louisiana appraisal requires the appraiser to:
- A Louisiana property has a replacement cost of $280,000, land value of $60,000, and total accrued depreciation of $40,000. What is the estimated value using the cost approach?
- A property's gross rent multiplier (GRM) is calculated by dividing:
Practice More Louisiana Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Louisiana Quiz →