What is a common method used to estimate depreciation in property appraisal?

The age-life method is commonly used to estimate depreciation in property appraisal because it provides a systematic approach to analyzing the relationship between a property's effective age and its economic life. This method calculates depreciation by determining the ratio of the effective age of the property to its total economic life. By applying this ratio to the replacement cost new of the property, appraisers can estimate the amount of depreciation that has occurred.

This method is particularly useful because it allows appraisers to objectively assess the condition and longevity of a property based on its actual use and wear, rather than simply relying on market data or subjective assessments. It incorporates both physical deterioration and any functional obsolescence that may affect the property’s value, making it a comprehensive tool for estimating depreciation.

The other options, while related to property valuation and appraisal, serve different purposes and are not primarily focused on estimating depreciation. The replacement cost method involves assessing how much it would cost to replace the property, without specifically addressing depreciation. The market comparisons method evaluates properties based on sales of comparable properties rather than directly calculating depreciation. Finally, the gross income multiplier method is used to derive property value based on income generation rather than depreciation estimation.