Property Valuation
In West Virginia appraisal, 'effective age' is defined as:
AThe actual age of the structure since construction
BThe age the property appears to be based on its condition and utility✓ Correct
CThe remaining economic life of the structure
DThe age of the oldest component of the structure
Explanation
Effective age is the appraiser's opinion of the age a structure appears to be based on its observed condition and utility, considering the quality of maintenance, renovations, and obsolescence. A well-maintained 30-year-old building might have an effective age of 15 years.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
DepreciationA reduction in the value of an improvement (building) over time due to physical deterioration, functional obsolescence, or external factors.
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.
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