What is the definition of "remaining economic life" in real estate analysis?

The definition of "remaining economic life" refers specifically to the period during which a property is expected to continue generating income or providing value to its owner before it reaches the point where it may no longer be economically viable to maintain. This concept is crucial in real estate analysis as it helps determine the potential profitability of an investment property.

Remaining economic life is not based on the overall lifespan of a property, as properties can last much longer than their economically viable phases. Additionally, while depreciation is a factor in property values, the term does not refer to the time before a property begins to depreciate, as depreciation can already be occurring while the property still has a remaining economic life. Lastly, it does not pertain to the duration of property ownership; owners may hold a property for various lengths of time, but the economic life focuses solely on the income-generating potential during its useful phase.