Effective Age

[Dontbethatguy]

You cant double dip effective age, because your subject has a condition that can be cured. Makes no sense. Im pretty sure Stefan had you squared away from GO. I do however really like Greg's four flat tire quip. Read, read, rinse, repeat, until it makes sense.

 

[Mztk1]

Effective age may not be a function of the cost approach, but it is a measure of the depreciation that occurs over the life of the improvement (or component). You need to know 1. The value of the improvement as if new; 2. the economic life of the improvement (economic life = The period over which improvements to real property contribute to property value and can broken down to Total economic life (as if new) and remaining economic life (as is)); 3. amount of depreciation relative to total value of the improvement and broken out into a ratio between actual economic life (effective age) and total economic life.

The "value of the improvements" can be market extracted, or based on the cost approach, or based on an allocation method.

There are ways to complicate this answer and turn this into a debate on the effective age with really has a wishy washy meaning. Pragmatically speaking, however, I think the approach I provided above is valid for residential appraising.

 

[EDWARD BERRY]

Jim Got It Right