Effective Age
The age of a property as indicated by its condition, maintenance, and updates, which may differ from its actual (chronological) age. A well-maintained older home may have an effective age much lower than its actual age.
Effective age is an appraiser's judgment of how old the improvements "act" based on their current condition, utility, and competitiveness in the market. A 50-year-old home with a new roof, updated kitchen, modern mechanicals, and excellent maintenance might have an effective age of 15-20 years. Conversely, a 10-year-old home with severe deferred maintenance might have an effective age of 25 years. Effective age is used in the cost approach to estimate depreciation: depreciation equals effective age divided by total economic life, multiplied by the cost new.
Related Terms
Depreciation
A loss in value from any cause.
Remaining Economic Life
The estimated number of years a property's improvements are expected to continue contributing to the property's value, calculated as total economic life minus effective age..
UAD Condition Ratings (C1–C6)
A standardized six-level scale for rating the physical condition of a property's improvements, ranging from C1 (new or recently constructed) to C6 (in need of substantial repairs and rehabilitation)..
Cost Approach
A valuation method that estimates value by calculating the cost to reproduce or replace the improvements, subtracting accrued depreciation, and adding the land value.
Physical Deterioration
A loss in property value resulting from wear and tear, damage, structural failure, or neglect of the physical improvements.
More in Property Characteristics
View allGross Living Area (GLA)
GLAThe total finished, above-grade living area of a residential property, measured in square feet.
Gross Building Area (GBA)
GBAThe total area of a building measured from the exterior walls, including all finished and unfinished, above-grade and below-grade spaces.
Below-Grade Area
Any portion of a building that is below the ground level on any side.
ANSI Z765 Measurement Standards
ANSIThe American National Standards Institute standard for measuring residential floor area.