Deconstructing Depreciation Part II

Last week we discussed physical depreciation. This week we will focus on the other components of depreciation: functional and external. Functional depreciation, sometimes called functional obsolescence, addresses inadequacies or superadequacies within the property. Here's an easy example. Compare a house built in 1914 to a house built in 2014. Here are some of the differences [...]

By |2014-08-14T11:50:32-04:00August 14th, 2014|Depreciation, Humor, Land, Real Estate, Terminology, Value|Comments Off on Deconstructing Depreciation Part II

Deconstructing Depreciation Part I

Depreciation is a widely misunderstood concept. Most people don't know, for example, that there are three kinds of depreciation: physical, functional and external. Today we will focus on physical depreciation. The concept of physical depreciation is pretty simple: things break down and wear out. As a gentlemen on the back nine of life (in fairness, [...]

By |2014-08-07T10:10:55-04:00August 7th, 2014|Depreciation, Economics, Real Estate|Comments Off on Deconstructing Depreciation Part I