Total economic life can be divided into what two categories?

Total economic life refers to the period during which a property can be used productively and is typically divided into two categories: effective age and remaining economic life. Effective age is an estimate of the age of a property based on its condition and utility, reflecting how well it has been maintained and its current functionality. Remaining economic life, on the other hand, represents the period during which the property is expected to continue contributing economically to its owner.

Understanding this distinction is vital for appraisers because it aids in evaluating the property's overall worth and its potential future income stream. By assessing both the effective age and remaining economic life, appraisers can make informed decisions regarding depreciation and the property’s ongoing value in the market. This division is crucial for accurately forecasting the longevity and useful life of a property, thereby informing investment decisions and property management strategies.