What term describes the amount of time that an improvement is expected to contribute to property value?

The term that describes the amount of time that an improvement is expected to contribute to property value is economic life. This concept refers to the period during which the property or improvement remains profitable or adds value to the overall real estate asset. Economic life considers factors such as market demand, trends, and the physical condition of the property, and it can differ from the physical life of the improvement, which is the total time the structure can exist before it deteriorates.

In the context of appraisal, understanding economic life is crucial, as it helps appraisers estimate the depreciation and project future cash flows associated with the property. While effective age refers to the age of a property based on its condition and utility rather than its actual chronological age, and physical life pertains specifically to the lifespan of the physical aspect of the structure, useful life indicates a more general time frame that may not directly correlate to property value as distinctly as economic life does.