Definition of plottage : the area included in a plot of land.
How is plottage value calculated?
The plottage increment refers to the value gained by combining the lots. For example, Steve owns two plots that are right next to each other. Each one is worth $40,000. When combined into a single property, the total value is now $90,000 and the increment is $10,000.
What is progression and regression in real estate?
Principle of progression is the idea that the value of a house increases when more valuable houses are built in the area. This contrasts with principle of regression, which is based on the concept that larger, more expensive houses lose value when they are near smaller, less valuable homes.
What is the principle of regression in real estate?
Regression – An appraisal principle which holds that a property of noticeably lower quality than those around it will tend to decrease the value of those neighboring properties; the opposite of the principle of progression.
What is the meaning of plottage? – Related Questions
What is Plottage value?
Plottage is the increase in value realized by combining adjacent parcels of land into one larger parcel. The process of combining the parcels is known as assemblage. Generally, the value of the whole parcel will be greater than the sum of the individual smaller parcels.
What is the opposite of regression in real estate?
The principle of regression in real estate is the opposite of the principle of progression. With this principle, the value of homes nearby can bring the value of a nicer home down.
Which of these is an example of the principle of regression?
The principle of regression states that the value of a more expensive property will decrease when less expensive properties come into the area. Thus, if your home is worth $500,00 and it is surrounded by $100,000 homes, the value of your property will go down.
What is the principle of regression quizlet?
The principle of regression states that when a superior property is placed in an area of properties that are of lower quality, the superior property’s value is diminished.
What is the principle of conformity in real estate?
The principle of conformity states that maximum value is realized when a reasonable degree of architectural homogeneity exists and land uses are compatible. This principle implies reasonable similarity, not monotonous uniformity, tends to create and maintain value.
What is functional obsolescence in real estate?
Real estate can exhibit functional obsolescence if its design features are outdated, not useful, or not aligned with market tastes and standards, such as when an old house is located within a neighborhood of new homes.
What are the four types of obsolescence?
Types
- Technical obsolescence.
- Functional obsolescence.
- Architectural obsolescence.
- Planned obsolescence.
- Inventory obsolescence.
- Style obsolescence.
- Obsolescence management.
What are the three types of obsolescence?
Key Takeaways. “Obsolescence” is the term used to refer to something that is either out of date, or no longer in line with market requirements. As it relates to a commercial real estate investment, there are three types of obsolescence: functional, economic, and physical.
What is the best example of functional obsolescence?
Understanding Functional Obsolescence
For example, an old, two-bedroom house in an area with modern three bedrooms with a bathroom in each room can be considered functionally obsolete. Other items that are highly prone to functional obsolescence include electronics, such as smartphones.
Which of the following is a type of functional obsolescence?
Functional obsolescence is ? a loss in value due to functional inadequacies such as defects in design, outdated fixtures, or an inadequate floor plan. obsolete kitchen appliances, one-car garages, and too few bathrooms in relation to the number of bedrooms.
How do you calculate functional obsolescence?
The formula for this method is: Market Value equals the Replacement Cost New less physical depreciation less the cost to cure (or the value of the loss, if less) less external obsolescence.
What is external obsolescence in real estate?
External Obsolescence is a form of depreciation caused by factors not on the property itself, such as environmental, social, or economic forces. An example would be a very nearby garbage dump. The homeowner cannot reverse this loss in value by spending money to fix something.
What is the difference between functional and external obsolescence?
Unlike functional obsolescence, which occurs within a property, economic obsolescence occurs outside the property and is beyond the control of the property owner. This means that the property is incurable because it would be too expensive to cure the problem.
Is obsolescence the same as depreciation?
Obsolescence is all about demand and so prices. “In practice, SNA depreciation and cross-section depreciation coincide if asset lives are not changing over time. But asset lives are demonstrably changing over time as assets become obsolescent.
What is an example of physical obsolescence?
Examples of physical obsolescence include leaking roofs, old HVAC units, old/non-energy efficient windows, etc.
What are the two types of physical depreciation in real estate?
Physical deterioration and functional obsolescence are further divided into two-sub categories: curable and incurable depreciation. Curable depreciation refers to a loss in value that is economically feasible to correct.