What does "economic life" refer to in property appraisal?

In property appraisal, "economic life" refers to the period during which a property is expected to generate income or retain its value. Understanding economic life is crucial for appraisers because it helps in estimating how long a property can remain a viable investment before it begins to lose its value due to factors such as depreciation, obsolescence, or market conditions.

This concept is central to various methods of valuation, including the income approach, where an appraiser considers the length of time a property will continue to produce income when determining its value. This allows for a more precise and informed assessment, as it focuses not just on the physical lifespan of a building but on its financial utility and performance over time.

The other options describe different aspects of property but do not capture the essence of economic life as defined in appraisal terminology. For example, the total lifespan of a property regardless of condition addresses longevity but not economic viability, while the time before major renovations pertains to physical upkeep rather than economic function. The duration for which a property is actively marketed relates to market conditions and selling strategies, which are separate from the concept of economic life.