Breakdown Method | Propertylogy

Breakdown Method

By on October 2, 2018

The breakdown method is a process used during home appraisal that separate depreciation into different components, each assigned to a weightage to it, to derive the depreciated value of a property.

The intention of such methods of calculation is not to determine the depreciation value for accounting or tax purposes.

It is used for estimating the current value of improvements made to the house which will be indicated in the appraisal report.

Because there are 3 primary types of property depreciation namely:

  1. Physical depreciation
  2. Functional obsolescence
  3. Economic obsolescence

Using the breakdown method is preferred for appraisers to make a more accurate judgement of how much depreciation would actually affect the value of property.

You May Also Like...

hair1 eye1 abs1
View the latest and lowest Singapore Home Loan rates
Why friends look forward to your FAILURE
Hiring a competent agent
Best EVER excuses for being late to work

Investors and homeowners receive our newsletters. Subscribe to our list.

Get More Real Estate Knowledge & Insights From Our Newsletters

Enter your email below

Send this to a friend