calculate depreciation expense

7 factors that influence property depreciation

Basically, who determines the value of real estate is the famous Law of Supply and Demand. The more interested in living in a certain region, the higher the value of the properties there. However, there are a number of internal and external factors that influence property depreciation.

As a realtor, you need to be aware of these details to let your homeowners know. In some cases, they don’t understand why their properties are priced below market prices. It is part of their job to explain the factors that impact the property’s value and, who knows, to suggest improvements to enhance it.

Knowing the factors that contribute to the depreciation of the property is also essential to guide the buyer client to make a good investment. For example, there is a subway project near the property under negotiation, it is very likely that it will appreciate in the future.

1. Noise

On the one hand, being close to avenues can be a positive factor. However, on the other hand, noise from high-flow roads becomes a factor that helps in the depreciation of the property. Party neighbors and streets used for funk balls, for example, are also a big problem. Finally, fairs also take the sleep of residents, since they are set up at the end of the night.

2. Far from commerce, school, work…

Due to the chaotic traffic of large cities, living far from your children’s school and work is a big nightmare. The situation gets even worse when it takes more than half an hour to go to the bakery or supermarket. Due to the time and money spent, it is undeniable that this directly impacts the property’s value.

3. uncovered garage

It may seem silly, but the garage is also a detail that influences the value of the property. If it is discovered, the tendency is for the property to depreciate. That’s because everyone wants to keep their vehicles out of the sun and rain, isn’t it?

4. Urban infrastructure

Absence of public services, such as hospitals, police stations and garbage collection, negatively impacts property value. Unpaved streets and poor lighting harm anyone’s life. Trading real estate in these locations is quite a challenge.

5. Decoration and conservation

Presenting a bad state of repair and falling apart furniture contribute a lot to the depreciation of the property. But here, there is a solution. First, you can give some quick and inexpensive makeover tips to fix cracks and remove stains from walls.

Finally, you can offer some decorating tips to make the property even more attractive to those interested.

6. View

Apartments in the same building may have very different prices due to the view. To get an idea, properties on the top floors can cost, in the plan, 10% more than those on lower floors. A cleaner view, apart from the noise of the shops and the avenue, is much more appreciated. If you are negotiating a property with a privileged view, take the opportunity to highlight it with photos in the ads, huh!

7. crime rate

Getting home must be synonymous with safety. So don’t ignore crime rates in the neighborhood you’re trading in. Those who live in violent regions want to move, which ends up devaluing local properties.

Understanding property depreciation to better negotiate

Knowing what are the factors that negatively impact the value of the property, you are better prepared to price the property in reality and negotiate with buyers. Here, it is very important to maintain transparency. If there is a problem with the property’s electrical panel, for example, inform the interested parties. Trust me, this is much better than withholding information.

When registering a captured property on your real estate platform, don’t forget to put all the positive and negative points of the property. That way, you don’t miss anything during the service. If you use vile Imo, you can even consult this information directly from your tablet or smartphone.


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