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.
Remaining economic life represents the appraiser's estimate of how many years the improvements will continue to add value to the land. When remaining economic life reaches zero, the improvements have no contributory value and may actually be a liability (demolition cost). For residential properties, total economic life is typically estimated at 50-70 years, but this varies significantly by construction quality, maintenance, and market area. FHA requires a minimum remaining economic life for mortgage eligibility. The remaining economic life must exceed the mortgage term for the property to qualify.
Related Terms
Effective Age
The age of a property as indicated by its condition, maintenance, and updates, which may differ from its actual (chronological) age.
Depreciation
A loss in value from any cause.
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.