Property Valuation
The effective age of a building differs from its actual (chronological) age in that effective age:
AIs always the same as the actual age
BReflects the building's condition and utility relative to a new comparable building — good maintenance means lower effective age✓ Correct
CIs determined solely by the original construction date
DIs calculated by the county assessor for tax purposes
Explanation
Effective age reflects how old a building appears based on its condition and utility. A well-maintained 40-year-old building may have an effective age of 20 years, while a poorly maintained 20-year-old building might have an effective age of 35.
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- Capitalization rate (cap rate) is calculated as:
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