Depreciation, in real estate appraisal, refers to the reduction in a property's value due to wear and tear, age, or other factors, which impacts its overall market value.
Depreciation (Appraisal) is a charge against the reproduction cost (new) of an asset for the estimated wear and obsolescence. This type of depreciation can be categorized as physical, functional, or economic.
Depreciation (Tax) refers to an annual tax deduction for wear and tear and loss of utility of property. It allows property owners to account for the decrease in value of their real estate assets over time.
Effective age refers to the age of a property based on the wear and tear it has sustained, as opposed to its actual chronological age.
Maintenance involves the activities carried out to ensure the upkeep, repair, and efficient operation of a property, compensating for wear and tear over time.
Physical depreciation or deterioration refers to the loss of value in real estate due to the wear and tear of structures over time. This can be caused by a variety of factors including breakage, deferred maintenance, the effects of aging materials, and normal wear and tear.
A reserve for depreciation, also known as accumulated depreciation, helps businesses account for the gradual reduction in value of their fixed assets over time due to wear and tear, obsolescence, or other factors.
Wear and tear refers to the gradual deterioration of property as a result of regular use, weathering, and age. This inevitable process affects the condition and value of various property assets over time.
