What are examples of functional obsolescence?
What are some common examples of functional obsolescence?
- Busy roads. In general, properties that are located on busy roads are considered less desirable.
- Mismatched numbers of bedrooms and bathrooms.
- Physical deterioration.
- Curable obsolescence.
- Incurable obsolescence.
- Superadequacy.
How do you calculate functional obsolescence?
Calculating Functional Obsolescence in Cost Approach Regarding a functional obsolescence deficiency that lacks something, the calculation is the difference between the reproduction cost with the curable item and without it, as of the date of appraisal. Note that this is reproduction cost and not replacement cost.
What are the 3 types of obsolescence?
There are three types of obsolescence or flaws that cause properties to lose value:
- Functional Obsolescence:
- Economic Obsolescence:
- Physical obsolescence:
What are the factors affecting functional obsolescence?
External Factors that Affect Functional Obsolescence
- Busy roads. A property may be located close to a road that can become busy in the long term.
- Construction of landfills.
- Construction of low-income housing.
Which of the following would be the best example of functional obsolescence?
Which of the following is the best example of functional obsolescence? Old fashion architecture such as massive cornices, would be classified as functional obsolescence.
What is an example of external obsolescence?
External Obsolescence is a form of depreciation caused by factors not on the property itself, such as environmental, social, or economic forces. An example would be a very nearby garbage dump.
Is physical deterioration curable?
Physical deterioration may be due to the action of elements such as floods, earthquakes, fire, ultraviolet sunlight, wind, etc. The deterioration may be curable or incurable, depending on the economic feasibility of carrying out the repairs.
What is functional obsolescence quizlet?
Functional obsolescence is a property’s loss of value due to functional inadequacies that are usually caused by age or poor design, such as a poor floor plan, excessively high or low ceilings, or antiquated architecture.
What is functional or physical obsolescence?
Functional obsolescence refers to a reduction in the usefulness of a property due to factors within it, except those due to physical deterioration.
Which of the following is the best example of functional obsolescence group of answer choices?
What is the difference between functional obsolescence and economic obsolescence?
Functional obsolescence refers to a reduction in the usefulness of a property due to factors within it, except those due to physical deterioration. Unlike functional obsolescence, which occurs within a property, economic obsolescence occurs outside the property and is beyond the control of the property owner.
What is economic or external obsolescence?
External or economic obsolescence (EO) is a form of depreciation caused by influencing factors that are independent of the property. More specifically, it is the loss in value caused by those outside factors.
When does functional obsolescence occur in real estate?
In real estate, functional obsolescence exists when a property loses its usefulness and appeal. Some property features, amenities or designs could become obsolete with the passage of time.
Which is an example of functional obsolescence in accounting?
Depreciation of an asset is one example of quantifiable functional obsolescence. Companies can use various accounting methods to calculate the depreciation of an asset on its books, but the overall goal is to measure and track an asset’s declining usefulness over time.
What’s the best way to cure functional obsolescence?
For example, a simple update to an outdated electrical system or low-level redesign of the kitchen, installation of new fixtures, or adding insulation are good and affordable solutions to cure functional obsolescence. Keep in mind that the cost of the improvement should not exceed the market value of the property.
Which is better functional obsolescence or reproducible features?
Properties labeled functionally obsolete are typically less desirable in the property resale market and cost less to acquire. In most cases, replacing a property with functional obsolescence costs less and is a better investment than reproducing or trying to correct its functionally obsolete features.