Effectve Age

[J Grant]

"your own chart says 8) Economic Life ( age ) then #()9 it lists effective age estimate"

That is the whole point of this exercise!!!!!!!!!!!!!!!!!!!!!!!!!


The economic life is a constant which you pull from a cost manual!!! Economic life should be the same for your comparable sales as they are COMPARABLE to the subject!!!

If the comparable sales have a different quality of build or have a significant difference in chronological age as compared to the subject, better not to rely on them for supporting the development of effective age.

Yes, although not specifically outlined in USPAP, we do need to apply common sense in our methodologies.


Here is a table suggesting economic life from Marshall & Swift, it is also used in the article which I attached if you actually took the time to read it.


View attachment 72603

You are confusing economic life with effective age, they are not one and the same. Read the definitions of each one. For Comps we use effective age for comparison with the effective age of the subject

 

[Basically Rectangular]

I've always used reciprocals to calculate TEL. Of course, I don't trust cost manuals. Based on the example you used above, the TEL would be 81 years, not 55, right?

43% depreciation / 35 years = 1.23%/year. 1/1.23% = 81 years, right?

No, depreciation here is calculated based on a 55 year TEL, we don't apply that to the chronological age.

Use whatever method you want for calculating TEL. If you don't trust cost manuals, don't use them. However cost manuals are unbiased third party sources and considered good support IMO.

 

[Basically Rectangular]

You are confusing economic life with effective age, they are not one and the same. Read the definitions of each one. For Comps we use effective age for comparison with the effective age of the subject

 

[alebrewer]

No, depreciation here is calculated based on a 55 year TEL, we don't apply that to the chronological age.

Use whatever method you want for calculating TEL. If you don't trust cost manuals, don't use them. However cost manuals are unbiased third party sources and considered good support IMO.

So you're saying my analysis is incorrect? Does not the data you provided actually show a TEL of 81 years, not a TEL of 55 years (as suggested by the cost book)? In order to have a TEL of 55 years, the annual depreciation would have to be around 1.8-1.9% per year, right?

 

[J Grant]

You are incapable of looking up the definition for each which would quickly tell you that economic life is a DIFFERENT concept than effective age ( thus the two estimates might not be the same ) Banging head on wall is you being too stubborn to do even a quick internet search of it.

 

[TerryRohrer]

You are incapable of looking up the definition for each which would quickly tell you that economic life is a DIFFERENT concept than effective age ( thus the two estimates might not be the same ) Banging head on wall is you being too stubborn to do even a quick internet search of it.

If you would take a minute to read your own posts, you will find the source of their frustration. You interjected the fabricated term "economic age" and simply bull-headed your way past their question asking you what that was. The rest of your posts in this thread are about as discombobulated. But, I'm sure you won't bother wasting a tiny effort on introspection. Carry on!

 

[Mejappz]

You are adding confusion to this subject.

She adds confusion to every thread.

 

[J Grant]

If you would take a minute to read your own posts, you will find the source of their frustration. You interjected the fabricated term "economic age" and simply bull-headed your way past their question asking you what that was. The rest of your posts in this thread are about as discombobulated. But, I'm sure you won't bother wasting a tiny effort on introspection. Carry on!

So you think the OP by not understanding the difference between effective age and economic life and thinking they are the same, is worse than my using in one post the term economic age ( which I explained is for addressing economic life).

With this post and in the past you have shown a nasty personal vendetta wrt me which has nothing to do with the appraisal topics being discussed. I doubt you are capable of a tiny effort of introspection wrt why your toxic hatred informs your posts here. The toxicity factor is creepy approaching the level of scary.

 

[alebrewer]

you have shown a nasty personal vendetta wrt me

you're not special, J...

 

[J Grant]

you're not special, J...

? He has it against other people too? Lol and I thought I was special to get this level of toxic hatred from an internet poster I never met.