Property Valuation
The 'economic life' of a building in an appraisal context refers to:
AThe number of years the building was originally built to last
BThe period during which the improvements contribute positively to the property's value✓ Correct
CThe depreciation period for tax purposes
DThe number of years until the mortgage is fully amortized
Explanation
Economic life is the period during which improvements to real estate contribute positively to the property's total value. When a building's operating costs exceed its income production, it has exceeded its economic life. Effective age and remaining economic life are both important appraisal concepts.
Related Oregon Property Valuation Questions
- In the cost approach, what does 'accrued depreciation' represent?
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