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Question:

When comparing the economic life and the physical life of an improvement ____

A economic life is shorter.
explanation

A building will become economically undesirable long before it is physically unusable.

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Related Questions

Which of the following does a property owner not show as an expense?

depreciation.

Only depreciation is a non-cash factor.

Restoring a property to a satisfactory condition without changing the floor plan, form, or style of the building is known as ____

rehabilitation.

Rehabilitation suggests making necessary repairs without changing any other elements of the property. Remodeling would change things to current style and preference.

The elements of value do not include ____

cost and age.

The elements of value are Demand, Utility, Scarcity and Transferability (DUST) . Therefore, the correct answer, that which is not included as an element of value, is “cost and age”.

When conducting an appraisal, an appraiser considers all the following except ____

the assessed value of a property.

The assessed value is the county tax assessor’s determination of value for the purposes of calculating property taxes.

Demand has no effect on value unless there is also ____

purchasing power which enables the ability to buy the thing in demand.

Demand requires the ability to pay, called purchasing power.

An analysis of rental income does not determine the income’s ____

suitability for reinvestment.

As applied to rental income, durability = longevity; quantity = amount of rent; quality = assurance of payment.

Compared to a property’s physical life, economic life is generally ____

shorter.

A building will become economically undesirable long before it is physically unusable. Note that economic life represents the length of time a building produces a reasonable return. Alternatively, physical life is based on how long the building would remain physically standing. Thus, a property’s economic life is the shorter of the two.