Which type of depreciation is considered overall wear and tear on a property?

Physical deterioration is the type of depreciation that refers to the overall wear and tear on a property. This form of depreciation occurs naturally over time as a result of use, aging, and exposure to the elements. It can be due to factors such as weathering, aging of materials, or even harm caused by neglect or lack of maintenance.

In assessing properties, appraisers consider physical deterioration when estimating the value of improvements and the overall condition of the property. It is distinct from other forms of depreciation, as those, like functional obsolescence or economic obsolescence, pertain to aspects that influence value but do not directly relate to the physical state of the property itself. For instance, functional obsolescence might be related to outdated features or design, while economic obsolescence is tied to external factors affecting property values, such as neighborhood decline. Curable depreciation refers to items that are economically feasible to fix, reflecting improvements that can restore value to a property rather than the inevitable physical wear it experiences over time.