The Effective Age of a residence is its age in years as compared with other residences performing like functions. It is the actual age less any years that have been taken off by face-lifting, structural reconstruction, removal of functional inadequacies, etc.
Use the following steps to determine the effective age of a residence:
Typical Life: Determine the residence's Typical Life, based on its type, exterior wall type and quality, using the "Typical Lives" table contained in Section E of the Residential Cost Handbook (and duplicated in the help for Typical Life).
Remaining Useful Life: Estimate the building's remaining useful life, based on an evaluation its condition, construction quality, actual age and any renovations or repairs that have been made.
Effective Age: Subtract the remaining useful life from the Typical Life to obtain the Effective Age.
Example: For a good quality, single-family residence built 30 years ago with frame exterior walls, the following renovations and repairs have been completed:
The electrical system was replaced 10 years ago.
The heating plant was replaced 4 years ago.
The roof was repaired 8 years ago.
The interior was completely renovated 10 years ago, with new floor covering, wall finish and plumbing fixtures.
Based on the dwelling's current good condition and a subjective evaluation of the effect of these changes, you estimate that the remaining useful life is now 45 years. The Typical Life for this residence is 55 years (see table in the help for Typical Life). Therefore, the effective age is:
|
Typical Building Life |
55 years |
|
Minus: Remaining Useful Life |
-45 years |
|
Effective Age |
10 years |
The entry of Effective Age is optional, except if you select either of the following options for calculating Physical and Functional Depreciation:
Using Marshall & Swift Tables: With this option, Residential Estimator calculates the amount of normal physical and functional depreciation using the depreciation schedule in the Residential Cost Handbook, based on the occupancy, construction class and quality in addition to effective age.
Age/Life (Straight Line): With this option, Residential Estimator calculates the amount of physical and functional depreciation by dividing the Effective Age by the Typical Life.