cabarrus county board of commissioners regular meeting november ...

October 17, 2011 (Regular Meeting)Pagecalculating each aging period separately and summing the depreciation. Usingan exterior wall type 17, (CB Stucco), we calculate the total depreciation asfollows:FIRST 2 YEARS = 4.00 2 X 1.00NEXT 22 YEARS = 22.00 22 X 1.0024 YEARS = 26% TOTAL DEPRECIATIONThe maximum normal depreciation normally allowed is 70% or a residual of 30%good. As we have not exceeded this figure, the 26% depreciation from normalphysical deterioration is not over ridden.FOR RESIDENTIAL OR INCOME PROPERTIES WITH A MINIMUM OR EXCELLENT QUALITYFACTOR another table has been constructed which bases the amount ofdepreciation for a particular property on its useful life, meaning that ageat which a property ceases to be functional. For example, IMPROVEMENT USECODE 23 has a typical life expectancy of 25 years. Therefore when thebuilding is 25 years old, it has been depreciated down to the lowest point of30% condition or 70% depreciation.SCHEDULE FOR DETERMINING DEPRECIATION ON BUILDINGS WITH A 40 YEAR LIFEEXPECTANCY AS USED IN THE EXAMPLE ABOVE.40 YEAR LIFE EXPECTANCY - DEPRECIATION SCHEDULE #6EFFECT. AMOUNT PERCENT. * EFFECT. AMOUNTPERCENT.AGE OF DEPR. GOOD * AGE OF DEPR.GOOD1 1 99 21 37632 2 98 22 39613 3 97 23 41594 4 96 24 43575 5 95 25 45556 7 93 26 47537 9 91 2749 518 11 89 2851 499 13 87 2954 4610 15 85 3057 4311 17 83 3160 4012 19 813263 3713 21 7933 66 3414 23 7734 68 3215 25 7535 70 3016 27 7336 70 3017 29 7137 70 3018 31 6938 70 3019 336739 70 3020 35 6540 70 30ECONOMIC OBSOLESCENCE - FUNCTIONAL OBSOLESCENCEECONOMIC OBSOLESCENCE is determined through value loss due to conditionsoutside the property.FUNCTIONAL OBSOLESCENCE is determined through value loss within the property.Economic and functional obsolescence is depreciation added to the NormalDepreciation. Therefore if a building has 10% normal depreciation due to itsage and you apply 10% Economic Obsolescence due to outside influence, thetotal depreciation would be 20%.Chapter 8INCOME PROPERTY VALUATIONPREFACEIt should be noted that this chapter is not designed to be a comprehensivetext on income properties but only a summary and outline of the incomeapproaches to value which can be applied through the PASCO Appraisal System.This capability enables mass property appraisers to apply techniques whichheretofore proved too time consuming for mass appraisal. However, we wouldlike to recommend further study with such text as that by Dr. William N.Kinnard, INCOME PROPERTY VALUATION, to familiarize the property appraiserwith some of the more subtle but important points of income propertyappraising.A-1Page 126