EstatePass
Real Estate Math

The type of depreciation that is NOT curable because it is caused by factors outside the property is:

  • aPhysical deterioration
  • bFunctional obsolescence
  • External (economic) obsolescence
  • dDeferred maintenance

Answer: C · External (economic) obsolescence

External (economic) obsolescence is caused by factors outside the property — a noisy highway, a declining neighborhood — and is generally incurable. Physical and functional issues are often curable. Common trap: students think all depreciation can be fixed; external obsolescence cannot be cured by the owner.

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