Curable Depreciation | Propertylogy

Curable Depreciation

By on September 11, 2019

Curable depreciation refers to factors that causes a property’s depreciation in value which can be corrected at a cost that will be recouped from the value that is added back.

From a logical and mathematical perspective, there should be no reason for repairs and maintenance works not to be undertaken on curable depreciation.

The only reason being the lack of cash flow and working capital.

Even so, the economic benefits should be enough to convince a landlord or business person to obtain a loan so as to get the repairs done.

Some might feel that if there is no economic profit or loss being made after repairs are done, that there will be no point to do them in the first place.

But consider that this means that the landlord would essentially breakeven when the economic benefits are equal to the expenses. However, tenants and patrons would have a much better experience at the property at no extra cost to the landlord.

This can lead to happier tenants who would easily renew their leases or invite word-of-mouth marketing.


Send this to a friend