What does "effective age" refer to in property appraisal?

Effective age in property appraisal refers to the age of a property as influenced by its current condition and utility, rather than just the number of years since it was built. This concept recognizes that some properties, despite having a certain chronological age, may appear to be newer or older based on factors like renovations, maintenance, and overall functionality.

For instance, a property that has undergone significant upgrades and has been well-maintained may be viewed as having a lower effective age because it meets current market expectations and serves its intended purpose effectively. Conversely, a property that has not been maintained could be considered to have a higher effective age even if it was built more recently.

Understanding effective age is crucial for appraisers as it helps them assess how much actual wear and tear a property has experienced and how that affects its value in the current market.