What does effective age reflect in an appraisal context?

Effective age in an appraisal context represents the appraiser's judgment about the property's condition and utility relative to its chronological age. It takes into account various factors such as maintenance, renovations, and overall upkeep, which may lead to a property being perceived as newer or older than its actual age. This subjective assessment influences the economic life of the property, which is the duration over which it is expected to remain useful and can generate value. Therefore, effective age is essential in determining depreciation and helps in estimating the property's market value accurately. By assessing effective age, appraisers can better reflect the property’s true condition and its potential to generate income or experience appreciation over time.