Which of the following lists the three types of depreciation recognized in real estate appraisal?
Correct Answer
A) Physical deterioration, functional obsolescence, and external obsolescence
The three types of depreciation recognized in real estate appraisal are: physical deterioration (wear and tear on the structure), functional obsolescence (outdated or inadequate features that reduce desirability), and external obsolescence (loss in value caused by forces outside the property, such as neighborhood decline or nearby nuisances).
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Related Concepts
The cost approach estimates a property's value by calculating the current cost to rebuild the improvements, subtracting accumulated depreciation, and adding the land value. It is most reliable for new construction and special-purpose properties.
Depreciation is an accounting method of allocating the cost of an asset over its useful life, allowing investors to deduct a portion of the asset's cost each year.
Highest and best use is an appraisal concept that identifies the most profitable, legally permitted, physically possible, and financially feasible use of a property. It is the foundation of all property valuation.
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Which of the following best describes how Utah's rapid population growth, driven partly by Silicon Slopes tech expansion, has affected housing affordability?
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- → The income approach to appraisal is most commonly used for which type of property?
- → External obsolescence in Oklahoma:
- → Which of the following correctly lists the three types of depreciation recognized in real estate appraisal?
- → The sales comparison approach to appraisal is most appropriate for which type of property?
- → Which formula correctly calculates the capitalization rate?
- → The sales comparison approach to appraisal is most commonly used for which type of property?
- → Which four tests must a use satisfy to qualify as the highest and best use of a property?
- → Three depreciation:
- → Cap rate:
- → A Comparative Market Analysis (CMA) is best described as which of the following?
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