Property Valuation
Accrued depreciation in the cost approach to appraisal is the sum of:
AAnnual mortgage interest payments
BPhysical deterioration, functional obsolescence, and external obsolescence✓ Correct
CIncome lost due to vacancies
DCost of deferred maintenance only
Explanation
Accrued depreciation in the cost approach represents all loss in value from all sources: physical deterioration (wear and tear), functional obsolescence (outdated features), and external obsolescence (outside influences).
People Also Study
Related Oklahoma Questions
- Functional obsolescence in real estate refers to a loss in value due to:Property Valuation
- In the cost approach, accrued depreciation includes which three types?Property Valuation
- Land value in the cost approach to appraisal is estimated as if the land were:Property Valuation
- Which appraisal approach is most commonly used to value single-family residential properties?Property Valuation
- A property has a land value of $45,000 and improvements value of $185,000 (before depreciation). Physical depreciation is estimated at 15%. What is the depreciated improvement value?Real Estate Math
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
Study This Topic
Practice More Oklahoma Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Oklahoma Quiz →