Understanding Actual Age vs. Effective Age in Property Appraisals: What You Need to Know
As an appraiser, one of my main jobs is to figure out how much a property is worth. When I'm doing this, I have to think about a lot of different things, like where the property is, how big it is, what condition it's in, and how old it is. When it comes to age, there are two different ways we talk about it in appraisals: actual age and effective age. Actual age is just how many years it's been since the property was built. This is based on official documents, like building permits, that tell us when the property was constructed. Effective age is a little different. It's more about how the property looks and works right now, and is based on things like how well it's been maintained and whether it's been updated or renovated over the years. For example, a property that was built 50 years ago might have an actual age of 50, but if it's been taken care of really well and looks like it's in great condition, we might say its effective age is lower. On the othe...