What impact can physical depreciation have on a property?

Physical depreciation refers to the loss of value of a property over time due to physical wear and tear, age, and deterioration of its components and systems. This condition often results in a reduced perceived value among potential buyers. When a property shows signs of neglect or requires significant repairs, it becomes less appealing in the market, leading buyers to be hesitant or to offer lower bids.

The perception of value plays a crucial role in a property’s marketability; if potential buyers view the property as needing substantial improvements, they may question its worth, leading to lower offers or a lack of interest altogether. Consequently, physical depreciation can negatively influence the property’s market appeal, making it essential for property owners to maintain their properties to preserve value and attractiveness.