Property Valuation
What is 'effective age' in South Carolina real estate appraisal?
AThe actual number of years since the building was constructed
BThe age indicated by the building's condition and utility, regardless of actual age✓ Correct
CThe age at which the building's depreciation begins
DThe number of years remaining in the building's economic life
Explanation
Effective age reflects the condition and utility of the building, which may differ from its actual (chronological) age. A well-maintained older building may have a lower effective age than a poorly maintained newer one.
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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
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