Hi there,
I am a real estate investment advisor and I have many clients, who are investors, say that they are aware that if they wish to profit from their assets, they need to prevent functional obsolescence. Few, however, take the time to consider what the concept functional obsolescence actually implies or how to prevent it. So, please continue reading as I tell you about functional obsolescence definition and how it can harm your assets.
Get completely verified and strategically designed homes with best quality construction on NoBroker and save huge by avoiding brokerage charges.What is functional obsolescence?
Functional obsolescence refers to a decrease in the property's appeal, usually brought on by an old feature that is difficult to change or update.
It's crucial to remember that the phrase "functional obsolescence" is used in a variety of fields and is not just relevant to the real estate sector. For instance, functional obsolescence is frequently brought up in connection to cellphones in the technology sector. These devices soon become functionally obsolete because manufacturers of smartphones are continually releasing new technology and remastered editions of their products. Simply put, all of the earlier models of a specific smartphone become functionally obsolete as soon as a new model is produced and advertised for sale.
What are some common examples of functional obsolescence?
Examining instances is one of the finest methods to comprehend functional obsolescence. The most frequent causes of a property being deemed unserviceable in real estate are listed below.
- Active roads:
Properties near major roadways are typically thought to be less appealing. On the one hand, traffic conditions can make it challenging to regularly pull into and out of the driveway and dangerous for kids to play in the neighbourhood.
- Inconsistent numbers of bathrooms and bedrooms:
Functional obsolescence may also apply to houses with an unbalanced ratio of bedrooms to bathrooms relative to their square footage.
- Deterioration of the Building:
Deferred maintenance can cause physical deterioration, which is repairable but is also regarded as a kind of functional obsolescence. This is particularly true if every other house in the neighbourhood is kept up nicely.
This is all I know about functional obsolescence. I hope it helps you.
Read More: How to Calculate Depreciation of Building? How Built Property Value Depreciation Works in India?Your Feedback Matters! How was this Answer?
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What is Functional Obsolescence?
Jeevan
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3 Year
2022-06-27T10:51:41+00:00 2022-06-27T10:51:42+00:00Comment
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