Effective Age-Condition

[Mztk1]

agreed.


I have never seen a rehab'd house, even stripped to the rafters and studs that assumes the effective age of "zero"..it just doesn't seem to happen.

If you want some extremes in depreciation, try appraising a poultry farm. Updates required by the integrator are in cycles of about 7 years, sometimes less. The buildings will stand 30 + years. The equipment varies from 10 - 15 years in life but wall curtains, fans, and drinkers tending to the short side and feeders, heater, etc. to the long side of that range. Yes, each design may be similar for years. 40' x 400' houses were the norm around here for decades until 43' x 500' houses took over.
Yet, you have to analyze a sale with some knowledge of the barn age, the equipment age (or at least the last cycle required), and simply by looking at the equipment (a rusted feed bin is on its last legs literally as they will fall over if corroded) A functional is often present where an integrator requires equipment upgrades to transfer the contract but allows the current grower to eschew the upgrade. Depreciation is far more complex than appraisers seem awares.

I don't know the first thing about poultry farms, but aren't a lot of those things considered trade fixtures?

 

[Chris White]

The definition of effective age is as follows :
The appraisers OPINION of the physical condition of the structure in years.

That would lead to the assumption that using an effective age adjustment ans condition adjustment IS DOUBLE Dipping