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Correct estimate of the economic life for real property

By: Language: English Series: Real Estate Review ; 34(2) 2005, 78-89(17)Publication details: 2005Subject(s): Summary: Shows a short cut method for the estimate of Economic Life (EL) for real property. Its magnitude is shown to be driven by the components of accrued depreciation: the level of market forces of supply and demand, consumer tastes and the amount of owner maintenance. Presents a procedure that is based on market forces to determine an exact number for the estimate of EL needed by professionals involved with the value and financial analysis of property assets. Section 2 discusses the professional literature involving EL analysis and studies. Section 3 examines the components of accrued depreciation and the impact they have on the EL estimate. Section 4 defines EL and the paths it may take in the future depending on the loss in value from the owner's maintenance plans for the property and local market forces. Section 5 discusses the future paths of EL with respect to a specific property. Section 6 compares this material to several recent publications in a construction journal on the EL content. Concludes that the magnitude and path of total accrued deprciation is the critical factor. References.
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Item type Current library Call number Copy number Status Barcode
Journal article London Journal article L131773 (Browse shelf(Opens below)) 1 Available 131773-2001

Shows a short cut method for the estimate of Economic Life (EL) for real property. Its magnitude is shown to be driven by the components of accrued depreciation: the level of market forces of supply and demand, consumer tastes and the amount of owner maintenance. Presents a procedure that is based on market forces to determine an exact number for the estimate of EL needed by professionals involved with the value and financial analysis of property assets. Section 2 discusses the professional literature involving EL analysis and studies. Section 3 examines the components of accrued depreciation and the impact they have on the EL estimate. Section 4 defines EL and the paths it may take in the future depending on the loss in value from the owner's maintenance plans for the property and local market forces. Section 5 discusses the future paths of EL with respect to a specific property. Section 6 compares this material to several recent publications in a construction journal on the EL content. Concludes that the magnitude and path of total accrued deprciation is the critical factor. References.