Definition of "Curable depreciation"
Ron Utterback, Real Estate Agent
Keller Williams First Atlanta
Correcting depreciation by making improvements at less cost than the value added. For example, the management of an aging strip shopping center makes a decision to refurbish the windows and walkway at a cost of $2,000 per unit. Management estimates this will provide a rent increase of $100 per unit. The current neighborhood gross rent multiplier is 120. Therefore, the value added by the improvements is 120*100=$12,000 per unit. This is curable depreciation since the $12,000 unit value added more than compensates for the $2,000 unit cost of the improvements.
Have a question or comment? We're here to help.