Property Valuation
What is 'effective age' versus 'actual age' in real estate appraisal?
AThey are the same; appraisers use them interchangeably
BActual age is the chronological age of a building since construction; effective age reflects the building's condition and utility relative to comparable properties — a well-maintained older home may have a lower effective age than its actual age✓ Correct
CEffective age is used only for commercial properties in Nevada
DActual age is always higher than effective age
Explanation
A 30-year-old home that has been completely remodeled might have an effective age of 10 years because its condition and utility match that of a 10-year-old property. Conversely, a poorly maintained 15-year-old home might have an effective age of 25 years. Appraisers use effective age to calculate depreciation in the cost approach. In Nevada, extreme heat and UV radiation can accelerate physical deterioration, increasing effective age beyond actual age for improperly maintained properties.
Related Nevada Property Valuation Questions
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