The depreciation of the building is due to the deterioration of its physical condition, the discrepancy between the functional characteristics of the modern ideas of the real estate market, the influence of the external conditions of the operation of the object on its value. Since these factors are interconnected, their impact on the cost is assessed comprehensively.

Depreciation is the loss of value due to the deterioration of the physical condition of the object and / or moral obsolescence. Accumulated depreciation is defined as the difference between the current cost of restoration (replacement) and the real market value of the object on the date of valuation.

Depending on the reasons causing the loss of value, wear is divided into three types: physical wear, functional wear, wear of external influences.

Physical wear is the loss of value due to natural processes during operation. It is expressed in aging and wear, destruction, rotting, rusting, breakage and structural defects. This type of wear can be both removable and irreparable. Removable physical wear and tear (i.e. wear and tear that can be eliminated as a result of routine maintenance) includes scheduled repairs or replacement of parts of an object during day-to-day operation. Fatal physical wear is wear and tear, which is not economically feasible to correct, i.e. the cost of removing it is greater than the added value of the structure.

Functional (moral) depreciation is the loss of value due to the relative inability of a given structure to provide utility compared to a new structure created for the same purposes. It is usually caused by poor layout, non-compliance with technical and functional requirements in terms of size, style, service life, etc. Functional wear can be removable and irreparable. Functional wear is considered to be recoverable when the cost of repairing or replacing obsolete or unacceptable components is beneficial or at least does not exceed the amount of added utility and/or cost. Otherwise, the wear is considered irreparable.

Physical and functional deterioration is usually inherent in the property itself.

External (economic) depreciation characterizes the damage caused to the value of real estate by factors external to it. It is inherent exclusively in real estate due to the fixedness of its location.

Correctible wear and tear refers to the loss of value due to the typical buyer's potential costs of repairing building structures and building elements that have obvious damage or defects.

It is assumed that structures and elements are restored to a state corresponding to the conditions of normal operation, or completely replaced.

To determine the removable physical wear and tear we divided objects into separate structural elements and determined their technical condition.

Built objects under the influence of various natural and functional factors lose their operational qualities and are destroyed. In addition, the market value of the object is influenced by external economic impact from the immediate environment and changes in the market environment. At the same time, physical depreciation (loss of performance), functional aging (loss of technological conformity and value due to scientific and technological progress), external or economic depreciation (change in the attractiveness of an object in terms of changes in the external environment and the economic situation in the region) are distinguished. Together, these types of depreciation constitute accumulated depreciation, which will be the difference between the replacement cost of the object and the cost of reproduction / replacement of the object.

Under the physical wear of structures, elements, systems of engineering equipment, and the object as a whole, one should understand the loss of their original technical and operational qualities (strength, stability, reliability, etc.) as a result of the impact of natural and climatic factors and human activity. Physical wear at the time of its assessment is expressed as the ratio of the cost of objectively necessary repair measures that eliminate damage to structures, an element, a system or an object as a whole, and their replacement cost.

The amount of physical depreciation for the assessed buildings was determined by the modified lifetime method. This method is based on the determination of cumulative depreciation by calculating its two components: removable and irremovable physical depreciation.

At the same time, removable wear is taken equal to the cost of its elimination, and not removable wear is taken as the ratio of the effective age (EV) of the building to their typical economic life (TS), multiplied by the replacement cost (C), reduced by the amount of removable wear (UI). Thus, the formula for calculating cumulative depreciation is:

where the TS was determined according to the life of residential buildings, depending on the capitalization group, specified in the "Abstract of lectures on the basic principles of valuation technical condition buildings and structures of Yu. V. Beilezon.

The values ​​of removable physical wear of the structural elements of the building are determined in accordance with VSN 53-86 (r) "Rules for assessing physical wear and tear ...". According to these rules, removable depreciation of the premises is equal to the sum removable wear of individual structural elements of the building, multiplied by their share in the replacement cost.

Under the total accumulated depreciation, appraisers understand the loss of value of the property being valued for all possible reasons. The amount of accumulated depreciation represents the difference between the market value of the structure at the valuation date and its full replacement cost, calculated either as replacement cost or replacement cost. Cost approach considers the full replacement cost of the buildings being valued on the assumption that they are new. Therefore, having estimated the value of the total accumulated depreciation for buildings, appraisers subtract it from the indicator of the total replacement cost and, as a result, obtain the residual value of the building.

The physical life of the building (FZh) is the period of operation of the building, during which the state of the load-bearing structural elements of the building meets certain criteria (structural reliability, physical durability, etc.). The term of the physical life of the object is laid down during construction and depends on the capital group of the building. Physical life ends when the object is demolished.

Chronological age (XA) - the period of time that has passed from the commissioning of the object to the date of the assessment.

Economic life (EL) is determined by the operating time during which the object generates income. During this period, ongoing improvements contribute to the value of the property.

The effective age (EV) is calculated on the basis of the chronological age of the building, taking into account its technical condition and the economic factors prevailing on the date of the assessment that affect the value of the property being assessed. Depending on the characteristics of the operation of the building, the effective age may differ from the chronological age up or down. In the case of normal (typical) use of the building, the effective age is usually equal to the chronological

The remaining period of economic life (OSEZH) of a building is the period of time from the date of the assessment to the end of its economic life (Fig.).

Rice. Periods of the life of the building and the estimated indicators characterizing them

Estimated depreciation reflects the reaction of the market to certain characteristics of the property being valued, which distinguish it from a similar hypothetically newly built object at the date of valuation. The deterioration of buildings occurs under the influence of three main causes, which can manifest themselves both in a complex and in isolation. The assessment identifies the following reasons for the loss of value of buildings:

1. physical wear,

2. functional aging,

3. external (economic) aging.

Physical depreciation is a decrease in the value of property due to its physical aging, use, natural disasters and other factors that lead to a decrease in the life beneficial use property.

Modern construction technologies make it possible to build capital structures that are characterized by increased wear resistance, which also affects the increase in their life cycle. Therefore, it can be argued that new objects are a priori designed for at least 100 years; for especially capital structures, the term of physical suitability can be 100-175 years. But with the current pace of life, the rapid scientific progress, the obsolescence of many products, and real estate in particular, comes much faster than the physical one.

So, the Moscow hotel "Russia", which was opened in 1967, was closed for reconstruction in 2006. Naturally, the design of the hotel allowed it to be used further, but the inconvenient layout, low flows and other factors led to functional wear and tear. The building was dismantled. In many countries, such as Japan, the USA and others, such buildings are demolished after 20-30 years.

Valery Evstifeev gives the following examples for the capital's real estate market: “The aging process of buildings can be illustrated by the example of the retail and office markets. The first wave of creation of new shopping centers occurred at the end of the 1990s, office centers - at the beginning of the 2000s. Since then, not much time has passed, and, nevertheless, some of them are already now, formally being classified as Class A buildings, functionally outdated. This is due to the fact that many objects were built taking into account only the minimum requirements for a particular class (in particular, this concerns the number of parking spaces per 100 m 2 of area, layout, infrastructure, etc.). This situation can be explained by an acute shortage in all segments commercial real estate When the market absorbs almost all new supply, office and retail buildings are filled with tenants long before construction is completed. However, as the market saturates, developers will increasingly face the issue of creating more sustainable real estate from economic obsolescence.

This means that when designing an office, shopping center, hotel or any other building for commercial purposes, it is necessary not only to take into account modern technical requirements, but also to weigh and evaluate competition and requirements for objects from the market for several years to come.”

Due to the design features of real estate objects and due to the influence of various factors leading to destructive changes in the structure of the object, the wear of various structural systems and elements of the real estate object occurs unevenly, therefore, the calculation of the total wear indicator is always carried out element by element. This means that the appraiser separately inspects all structural systems of a building or structure, identifies and records signs of wear characteristic of a given structural system, and determines the wear of each system separately.

In any real estate object, the following structural systems can be distinguished: foundation, walls, ceilings, partitions, roofs, openings, floors. Each of these elements performs its specific function, is subjected to certain loads, has its own design and, as a result, has its own signs of wear. Let us dwell in more detail on the signs of wear of the most important of the listed structural systems.

Assessment of the condition of the property begins with the foundation, but not the entire foundation is available for inspection, at best, you can inspect the basement and basement of the building and, based on their inspection, assess the wear and tear of the foundation. What signs does the appraiser pay attention to? If the inspection did not reveal deformations of the basement, cracks, chipping of the mortar in the masonry, peeling of the plaster layer, and the basement of the building is dry without signs of a violation of the waterproofing, then we can talk about the good condition of the foundation, and the percentage of wear in this case will be no more than 10%. If there are deformations and cracks in the basement masonry, as well as other signs of wear, then there is every reason to study the state of the foundation more closely and establish the degree of wear based on the results of this study.

Walls are the main load-bearing structure of a building. They are brick, reinforced concrete wooden, etc., and the signs of wear, respectively, depend on the type of walls. For brick walls the main sign of wear is the presence of cracks, curvature of the horizontal lines of the masonry, deviation from the vertical, chipping of the mortar in the masonry, as well as a change in the state of the brick material.

The roof, as a rule, structurally consists of two main elements - the supporting structure and the roof. For the supporting structure, the main indicators are the correctness of the geometry and the condition of the material of the structure, and for the roof - the absence of leaks.

But the inspection of the main elements of the object and the establishment of signs of wear is only the first part of the work on assessing the value of the property. Having established the degree of wear of each element as a percentage, it is necessary to estimate the total wear, and this can be done if the percentage contribution of the cost of each element to the cost of the entire object is known. Such data can be found in the directories of the "Enlarged indicators of replacement cost", where all real estate objects are classified and the main reference indicators are given for them, including the percentage contribution of each structural system of a building or structure to the cost of an object. The presence of such directories greatly facilitates the work of the appraiser.

But not always work on assessing the depreciation of real estate is limited to the inspection and analysis of signs of depreciation. There are cases when only inspection is not enough. it difficult cases in which the appraiser assumes that the structure of a building or structure (especially foundations and walls) may have hidden defects that significantly worsen the characteristics of the object and may affect the economic life of this real estate. In this case, to determine the wear, it is necessary to carry out a special technical examination using tools and laboratory analysis. This work is no longer evaluating company, but a specialized organization with relevant experience, specialists and equipment.

The definition of depreciation is one of the most confusing and little discussed issues in the theory of valuation. This issue is often given only a few lines in the description of the alleged methods used. But the naturally arising question about the complexity of the described methods and the possibility of using these methods itself makes the conclusion about the factual arbitrariness of the depreciation assignment unambiguous.

Federal Agency for Education of the Russian Federation

State educational institution

higher vocational education

Izhevsk State Technical University

Votkinsk branch

Department "E and OP"

DP faculty

TEST

Subject: Real Estate Economics

on the topic: "Determining the depreciation of a property"

Completed: Art. gr. VZ 7-21-2 (5.6) Seletkova V.V.

Checked by: Fedorova L. L.

Votkinsk

The definition of depreciation is necessary in order to take into account differences in the characteristics of the new object and the real property being valued.

Wear in the assessment means the loss of utility, and hence the value of the object of assessment for any reason.

There are two ways to calculate depreciation:

Life time method;

The method of splitting into types of wear.

1. Calculation of wear by the life method

The cumulative accumulated depreciation is a function of the object's time.

When calculating depreciation using the effective age method, the following concepts are used: the physical life of the building, the effective age, the remaining economic life. Consider the periods of the life of the building and the estimated indicators characterizing them (see Fig. 1)

The physical life of the building (FZh) is the period of operation of the building, during which the state of the load-bearing structural elements of the building meets certain criteria (structural reliability, physical durability, etc.). The term of the physical life of the object is laid down during construction and depends on the capital group of the building. Physical life ends when the object is demolished.

Chronological age (XA) - the period of time that has passed from the commissioning of the facility to the date of the assessment.

Economic life (EL) is determined by the operating time during which the object generates income. During this period, ongoing improvements contribute to the value of the property.

The effective age (EV) is calculated based on the chronological age of the building, taking into account its technical condition and the economic factors prevailing at the date of the assessment that affect the value of the property being assessed. Depending on the characteristics of the operation of the building, the effective age may differ from the chronological age up or down. In the case of normal (typical) use of the building, the effective age is usually equal to the chronological one.

Remaining economic life (RESL) of a building is the period of time from the date of the assessment to the end of its economic life (Figure 1).

Periods of the life of the building and the estimated indicators characterizing them (Fig. 1)

Determining the depreciation of buildings by the lifetime method is based on an examination of the buildings of the object being assessed and the assumption that the effective age of the object relates to the typical economic life in the same way as accumulated depreciation to the cost of reproduction (replacement) of the building.

Indicators of physical depreciation, effective age and economic life are in a certain ratio, which can be expressed by the formula:

I = (EV: VF) 100% = [EV: (EV + OSF)] 100%, (1)

where I - wear,%;

EV - effective age, determined by an expert on the basis of the technical condition of the elements or the building as a whole;

VF - typical period of physical life;

OSFZh - the remaining period of physical life.

I \u003d (HV: VF) 100%, (2)

where I - wear,%;

VF is a typical period of physical life.

The use of formula (2) is also relevant when calculating percentage adjustments for depreciation in compared objects (comparative sales method), when it is not possible for the appraiser to inspect selected analogues to determine the indicators used in formula (1).

The percentage of depreciation of elements or the building as a whole calculated in this way can be translated into value terms (depreciation):

O \u003d CB (I: 100), (3)

where I - wear,%; CB is the cost of reproduction (replacement cost).

2. Calculation of wear by splitting into types of wear

The most common is wear breakdown method.

Depending on the factors that reduce the value of real estate, depreciation is divided into physical, functional and external (economic). Physical and functional wear can be removable and irreparable. Economic depreciation is usually irreversible.

Classification of depreciation of real estate objects (Fig. 2.)

Depreciation is considered to be removable if its elimination is physically possible and economically feasible. The sum of all possible types of depreciation is the accumulated depreciation of the property.

Physical deterioration reflects changes physical properties property over time (for example, defects in structural elements). Physical wear can occur under the influence of operational factors or under the influence of natural and environmental factors.

There are four main methods for calculating physical depreciation:

Expert;

Normative (or accounting);

Cost;

Method for calculating the life of a building.

The most accurate and most time-consuming way is expert. It involves the creation of a defective statement and the determination of the percentage of wear of all structural elements of a building or structure.

Example: Table 1 defines the wear of individual structural elements of the building by the expert method. Table 1

Calculation of the physical deterioration of the building (Table 2): table 2

Normative method calculation of physical depreciation is based on the use of various regulatory instructions of the intersectoral or departmental level. It is rarely used in appraisal practice.

cost method is to determine the cost of restoring elements of buildings and structures. By inspection, the percentage of wear of each element of the building is determined, which is then translated into value terms. The cost method is used to determine the removable physical wear.

A conditional example of calculating physical wear by the cost method is given in Table 3

Table 3

This method allows you to immediately calculate the wear of the elements and the building as a whole in terms of value. Since the impairment calculation is based on a reasonable actual cost of bringing worn parts to near-new condition, the result of this approach can be considered fairly accurate. The disadvantages of the method are the mandatory detailing and accuracy of calculating the costs of repairing worn-out building elements.

Lifetime method used to calculate physical depreciation.

To functional wear include a decrease in the value of property associated with the inconsistency of design and planning solutions, building standards, design quality, manufacturing material with modern requirements for these positions. The amount of removable depreciation is defined as the difference between the potential value of a building at the time of its valuation with updated elements and its same value at the date of the valuation without updated elements (the difference between the cost of reproduction of the building and its replacement cost).

Causes of functional wear:

Disadvantages requiring the addition of elements;

Deficiencies requiring replacement or modernization of elements;

Over-improvements.

Weaknesses requiring the addition of elements are elements of the building and equipment that do not exist in the existing environment and without which it cannot meet modern performance standards. Wear due to these positions is measured by the cost of adding these elements, including their installation.

Functional wear can be removable and irreparable. Removable functional wear is calculated most often by the cost method.

Shortcomings that require replacement or modernization of elements are items that still perform their functions, but no longer meet modern standards (water and gas meters and fire fighting equipment). Depreciation for these positions is measured as the cost of existing elements, taking into account their physical wear and tear, minus the cost of returning materials, plus the cost of dismantling existing ones, and plus the cost of installing new elements. The cost of returning materials is calculated as the cost of dismantled materials and equipment when used at other facilities (finalized residual value).

Superimprovements - positions and elements of the structure, the presence of which is currently inadequate to the modern requirements of market standards. Removable functional wear in this case is measured as the cost of reproducing superimprovement positions minus physical wear and tear, plus the cost of dismantling and minus the salvage value of the dismantled elements.

An example of over-improvements is the situation when the owner of the house, adapting it for himself, made any changes for his own convenience (investment value), which are not adequate from the point of view of a typical user. These include the redevelopment of the usable area of ​​​​the premises for a specific use, due to the hobbies of the owner or his occupation. Removable functional wear in such a situation is determined by the current cost of the cost of bringing the changed elements to their original state.

In addition, the concept of over-improvements is closely related to the segment of the real estate market, where the same improvements can be recognized both as appropriate for a particular segment and as redundant from the point of view of a typical user. Table 4 gives an example of the calculation of functional disposable wear. Table 4

Irremovable functional wear is caused by outdated space-planning and/or structural characteristics of the assessed buildings in relation to modern building standards. A sign of irreparable functional wear is the economic inexpediency of incurring costs to eliminate these shortcomings. In addition, it is necessary to take into account the market conditions prevailing at the date of the assessment for adequate architectural compliance of the building with its purpose.

Depending on the specific situation, the cost of irremovable functional wear can be determined in two ways:

Capitalization of losses in rent;

Capitalization of excess operating costs.

To determine the required calculated indicators (rent rates, capitalization rates, etc.), adjusted data on comparable analogues are used.

At the same time, the selected analogues should not have signs of irremovable functional wear identified in the object of assessment. In addition, the total income generated by the property complex as a whole (building and land) and expressed in rent should be divided into two components accordingly. You can use either the investment balance method for the building or the cost ratio analysis method to isolate the portion of income attributable to a building. land plot and the total sale price of the property complex. In the example below, the specified procedure is considered to be completed in the process of preliminary calculations (Table 5).

Table 5

Determination of impairment caused by irreparable functional wear due to an outdated space-planning solution (specific area, cubic capacity) is carried out by capitalization of losses in rent.

Calculation of unrecoverable functional wear by capitalizing the excess operating costs required to maintain the building in good condition can be done in a similar way. This approach is preferable for assessing the irremovable functional depreciation of buildings that differ in non-standard architectural solutions and, in which, nevertheless, the amount of rent is comparable to the rent for modern analogues, in contrast to the amount of operating costs.

An example of determining the amount of functional wear by capitalization of excess operating costs is presented in table 6.

Table 6

External (economic) depreciation- depreciation of the object due to the negative influence of the external environment in relation to the object of assessment: location, market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. Although external wear and tear in most cases cannot be eliminated, sometimes it can resolve itself due to a positive change in the surrounding market environment.

For rate external wear the following methods can be applied:

Rent loss capitalization method;

Excess operating cost capitalization method;

Pair selling method;

lifetime method.

Assessment of external depreciation by the method of capitalization of losses in rent and the method of capitalization of excess operating losses is carried out similarly to the calculation by these methods of functional depreciation discussed above. In the case of estimating external wear, it is necessary to identify losses in rent due to signs of external wear or excess operating costs due to signs of external wear.

The pair sales method is based on the analysis of available price information on recently sold similar properties (pair sales). At the same time, it is assumed that the objects of a pair sale differ from each other only in the economic depreciation identified and correlated to the object of assessment.

A similar approach to the calculation of external wear is shown in Table 7.

Table 7

Reasons for demolition:

The need for redevelopment;

Expansion of transport routes.

The technical condition of demolished buildings should be taken into account, which in many cases would allow them to be used for a fairly long period of time.

Example. The assessment is subject to a building previously found out from the housing stock and now adapted for administrative needs. The building is in the municipal property. The physical deterioration of the building being assessed, according to the BTI, at the time of assessment is 40%. The technical condition of the building, location and developed infrastructure indicate a fairly high commercial attractiveness of the facility from potential investors. However, according to the redevelopment plan, for the above reasons, the building is subject to demolition after five years from the date of assessment.

When inspecting the object, the expert identified the following indicators:

1) the effective age of the assessed building is 30 years;

2) the remaining period of economic life - 60 years.

The percentage of accumulated depreciation, excluding the effect of an external factor, is calculated by the formula:

I \u003d EV: (EV + OSEZH) 100 \u003d (30:90) 100 \u003d 33%.

Percentage of wear, taking into account the action of an external factor:

And \u003d (30 / 35) 100 \u003d 86%.

The accumulated depreciation calculated in this case in the amount of 86% is mainly due to the action of an external factor. The share of possible consideration of other types of wear in this result is extremely small, which allows us to consider the result obtained as external wear. A sharp reduction in the remaining economic life of the building leads to a decrease in investment attractiveness and, as a result, a landslide drop in the likely sale price. In such cases, the purpose of the valuation is not to calculate full ownership rights to the building being valued, but short-term lease rights for the remaining economic (physical) life, provided that any benefit from this acquisition is seen by the potential investor.

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Page 16 of 27

Methods for calculating physical wear and tear

To estimate the accumulated physical wear and tear, several methods can be used, which

are the most common.

1.

2. Determination of wear by the method of life of an object and its elements.

4. Determination of wear by the amount of repair work required to restore worn structural elements and devices.

5. expert method.

6. Probabilistic method.

1. Examination of the actual state of the object as a whole, its structural elements and engineering equipment devices (normative method).

Using normative calculation method physical wear and tear is calculated in proportion to the ratio of the actual and standard service life of the property as a whole or for its structures and elements separately. The actual service life of structures and elements is determined from the date of commissioning of the object of assessment or from the date of repair (replacement). Regulatory service life can be taken into account for two types of structures and elements: long-lived and short-lived.

Long-lived elements include building structures that form the supporting frame of the building. The normative period of their operation coincides with the normative period of operation of the building as a whole. Short-lived elements include building structures that must (or can) be repeatedly replaced over the lifetime of the property.

This method involves the application of various normative instructions of the intersectoral or departmental level. For example, "Rules for assessing the physical deterioration of buildings" departmental building codes VSN. These instructions (rules) are widely used in the BTI in order to assess the physical deterioration of residential buildings. In these rules, a description of the physical wear and tear of various structural elements of buildings and their assessment are given.

Identification of physical wear of structural elements, engineering systems is carried out by visual and instrumental field inspection of the building and is assessed by comparing the identified signs of physical wear with their quantitative values, which are given in the BCH.

2. Determination of physical wear and tear by the lifespan method.

There is a certain conceptual apparatus for this method: the term of physical life, the term of economic life, the effective age, the normative term of life.

Effective age T eff is the age indicated by the usefulness of the building. The effective age may be less than the actual age if the building has been operated at a high level or has been reconstructed. Conversely, if a building has been poorly maintained, its effective age may be greater than its actual age. The effective age is established on the basis of a visual inspection of the object of assessment and is based on the experience and judgment of the assessor-expert.

Normative service life T norms - the normatively established duration of operation of the building and its elements, subject to the rules and deadlines Maintenance and repair.

The amount of wear is expressed by the formula:

This method has a number of disadvantages:

Differences in the economic life of the building as a whole and the physical life of short-lived elements are not taken into account;

The determination of the effective and economic life is subjective on the part of the appraiser.

3. Determination of wear by splitting into types of wear.

Using this method, it is necessary to consider the removable and non-removable physical wear and tear of short-lived and long-lived building elements.

Separate calculations are made for the wear of short-lived and long-lived elements with subsequent summation.

To apply the breakdown method in determining the accumulated depreciation, it is necessary to have data on the cost of new construction, broken down by structural elements, as a calculation base.

Removable physical wear usually attributed to poor maintenance, which is why it is also called deferred repair. It is assumed that the typical buyer will make immediate repairs to restore the structure to normal operating characteristics (cosmetic repairs, repair of leaky roof areas, repair of engineering equipment, etc.), while it is assumed that the elements are restored to a new or near-new condition. The amount of correctable physical wear and tear is equal to the cost of restoring a building element to a state of normal use.

irreparable physical wear and tear corresponds to positions, the correction of which is currently practically impossible or economically inexpedient. The amount of this type of depreciation is determined on the basis of the difference between the full replacement or replacement cost and the amount of removable physical depreciation.

For the purposes of calculating wear and tear, structural elements that have irreparable physical wear are divided into long-lived and short-lived.

For long-lived elements, the expected residual life coincides with the residual economic life of the entire structure. Short-lived elements have less residual economic life than the entire structure.

To estimate the irremovable physical wear in short-lived elements, the difference between the total replacement or replacement cost of the element and the amount of correctable wear of the element is multiplied by the ratio of the actual age to the total physical life of the element.

In this case, the overall physical life of the element is determined by reference data, taking into account periodic repairs and maintaining normal operational characteristics.

After determining the values ​​of removable physical wear and the sum of the replacement cost of short-lived elements with irremovable physical wear, it is necessary to subtract these values ​​from the total replacement or replacement cost to determine the basis for calculating the irremovable physical wear in long-lived elements.

The cost of irreparable physical wear and tear in long-lived elements is calculated as the ratio of the actual age of the building to the total physical life of the building, multiplied by the residual replacement or replacement cost of long-lived elements (previously determined base).

The overall physical life of the building is determined depending on the type of main structural elements for various categories of buildings in terms of durability.

4. Determination of physical wear and tear by the volume of repair work.

This method is also called the cost method. Its essence is to determine the cost of recreating building elements. Briefly, this can be expressed as a formula:

where C str is the total replacement cost of the repaired elements of the building, determined by the estimate for construction and installation work or according to UPVS;

With rem - the cost of repairs, determined by the estimate for repairs.

This method is quite labor intensive.

5. Expert method.

Main difference expert method from the normative is that withThe service life (percentage of wear) of the elements and the building as a whole is assigned according to expert data.

6. Probabilistic method.

Probabilistic method calculation allows you to find the parameters of physical wear in the conditions of uncertainty of the initial data. The computational algorithm models on each implementation certain input parameters as random variables. The choice of the number of realizations depends on the required accuracy of the results.

as simulated random variables can be chosen:

Service life of short-lived elements;

The service life of the building as a whole;

Element wear percentage.

Definition of functional wear

Signs functional wear in the assessed building, as a rule, there is a discrepancy between its space-planning, constructive solution to modern standards, including the equipment necessary for the operation of the building (structure). Functional wear is divided into removable and irremovable.

The main methods used in the assessment of functional wear:

– breakdown method;

– capitalization of losses in rent;

– capitalization of excess operating costs necessary to maintain the building in good order.

To eliminateable functional wear referloss of value as a result of inconsistency of the project, materials, building standards, design quality with modern market requirements for these positions. Similar to removable physical wear, removable functional wear is measured by the cost of correcting it.

Removable functional wear is caused by:

Disadvantages requiring the addition of elements;

Deficiencies requiring replacement or modernization of elements;

- "superimprovements".

The disadvantages that need to be added include items that are not in the existing structure, and without which the structure cannot meet modern standards. The quantitative measure of removable functional wear due to deficiencies requiring additions is the difference between the cost of making the required additions at the time of the assessment and the cost of making the same additions if they were made during the construction of the object of assessment.

The disadvantages that require replacement or modernization of elements include positions that still perform their functions, but no longer meet modern market standards. Removable functional wear due to items that require replacement or modernization is measured as the cost of existing elements, taking into account their physical wear, minus the cost of returning materials, plus the cost of dismantling existing ones, plus the cost of installing new elements. At the same time, the cost of returning materials is determined as the cost of dismantled materials and equipment when used at other facilities.

To "superimprovements" include positions and elements of the structure, the presence of which is currently inadequate to the modern requirements of market standards. Removable functional wear due to "over-improvements" is measured as the current replacement cost of the over-improvement item, minus physical wear and tear, plus the cost of dismantling, and minus the return of materials, if any.

The concept of "over-improvements" is closely related to the segment of the real estate market, where the same improvements can be recognized both as appropriate for a particular segment and as redundant from the point of view of a typical user.

The economic inexpediency of carrying out the costs of eliminating the shortcomings of space-planning, design solutions allows us to judge the signirreparable functional wear.

is determined by the replacement cost of missing, obsolete or redundant elements, on the one hand, and losses from them, on the other. Loss refers to either a net loss of income or additional operating costs.

Unrecoverable functional wearcalled:

Disadvantages due to positions not included in the cost of new construction, but which should be;

Disadvantages due to items included in the cost of new construction, but which should not be;

- "superimprovements".

The irreparable functional depreciation due to items not included in the cost of new construction is measured as the net income attributable to this deficiency, capitalized at the capitalization rate for buildings, minus the value of the items if they were included in the cost of new construction.

The calculation of irreparable functional wear due to imperfections does not depend on whether the replacement or replacement cost will be taken as a basis.

Unrecoverable functional depreciation due to items that are not included in the cost of new construction, but which should not be, is measured as the present value of the new, minus the related physical depreciation, minus the value of the added (that is, the present value of the additional costs associated with the presence of this item).

Extreme functional obsolescence can significantly impact the value of the property being valued.

Determination of external (economic) depreciation

Economic (external) obsolescence or environmental obsolescence , is caused by factors external to the property, and is always considered unavoidable because the magnitude of the potential cost makes it unsustainable to purchase surrounding objects and remove associated harmful elements just to increase the value of one affected object.

Economic depreciation determines the decrease in the utility of the property as a result of changes in external factors. These factors could be congested streets or an industrial plant located in or nearby a residential area. It could also be the location of the object. Economic obsolescence is unremovable, since the cost of it is many times greater than the value of the increase in value after the elimination of external factors. But economic wear and tear can also be temporary, such as a decline in real estate activity.

External depreciation is inherent exclusively in real estate due to the fixedness of its location. The impact of a property's environment on its value can be measured by the appraiser's intuition through the effective age of the building. But the most reliable result of the value of economic depreciation is able to give a direct measurement of the reaction of the market to changes in the property itself and its environment. The following methods can be used to assess economic depreciation:

Rent loss capitalization method

The application of this method requires the availability of data on rent (annual rent) for comparable properties. The sequence of analysis is as follows.

1. The value of rental losses is determined as the difference in rent under stable and changed external conditions.

2. From the obtained value, the share of rental losses attributable to the building is allocated. This means that part of the rent falls on the land.

3. The allocated share of rental losses is capitalized (divided by the capitalization ratio) based on the prevailing capitalization rate for such buildings.

Comparative sales method

The comparative sales method is based on the analysis of available price information for recently sold similar properties (pair sales).

The algorithm for applying the comparative sales method is as follows.

1. Comparable objects to the evaluated object are determined.

2. Differences in objects are corrected, excluding external factors.

3. The difference in market values ​​after adjustment is depreciated.

In some cases, the method of comparative analysis of sales allows you to determine the total accumulated depreciation, as a rule, of a typical appraisal object. In practice, this method is used only in the presence of reliable information.

Lifetime method

This method can be applied if there is a tendency for the remaining economic (physical) life of the property to be drastically reduced due to demolition. An example would be the demolition of real estate for the construction of a bridge, highway, redevelopment. When calculating the total accumulated depreciation, the predominant share is given to economic depreciation caused by external factors. The share of other types of depreciation will be small, so there is every reason to interpret the total accumulated depreciation as economic depreciation.

Determining the depreciation of a property

The full cost of reproduction or replacement is the sum of the costs of reproduction (replacement) of a new building at prices in effect on the date of the valuation. Therefore, it is necessary to take into account the differences in the characteristics of the new object and the property being valued.

Wear in the assessment means the loss of utility, and hence the value of the object of assessment for any reason. Depreciation (as a loss of value) can be expressed in absolute and relative units. If depreciation is expressed in absolute units (monetary units), then it is subtracted from the total cost of reproduction.

V play \u003d Vp play - And or V substitute \u003d Vp substitute - And, (6.5)

where CB is the cost of object reproduction;

V replacement - the cost of replacing object improvements;

Vp reproduction - the total cost of reproduction of the object;

Vp replacement - the total cost of replacing the object;

And - depreciation of the object of assessment, expressed in monetary units.

If wear is expressed in relative units (percentage), then the following formula is applied:

Vp play = V play (1 - I), (6.6)

where I - depreciation of the object of assessment, expressed in relative units.

There are two ways to determine wear:

• Life time method
• The method of splitting into types of wear.

Depreciation, as a loss of value, can be expressed both in relative terms (in relation to the full cost of reproduction or full replacement cost), and in absolute terms.

Calculation of wear by the life method

Wear is a function of the object's time.

Determining the depreciation of buildings by the lifetime method is based on an examination of the buildings of the object being assessed and the assumption that the effective age of the object relates to the typical economic life in the same way as accumulated depreciation to the cost of reproduction (replacement) of the building.

When calculating wear by the life time method, the following concepts are used:

The physical life of the building (T n) - the period of operation of the building, during which the state of the load-bearing structural elements of the building meets certain criteria (structural reliability, physical durability, etc.). The term of the physical life of the object is laid down during construction and depends on the capital group of the building. Physical life ends when the object is demolished.

Chronological age (T fact) - the period of time that has passed from the commissioning of the object to the date of the assessment.

The effective age (T eff) is calculated on the basis of the chronological age of the building, taking into account its technical condition and the economic factors prevailing on the date of the assessment that affect the value of the property being assessed. Depending on the characteristics of the operation of the building, the effective age may differ from the chronological age up or down. In the case of normal (typical) use of the building, the effective age, as

Rice. 6.1. Periods of the life of the building and the estimated indicators characterizing them

Indicators of physical depreciation, effective age and economic life are in a certain ratio, which can be expressed by the formula

And \u003d (T ef / T n) 100%, (6.7)

where I - wear, %.;

T eff - effective age, determined by an expert on the basis of the technical condition of the elements or the building as a whole;

T n - a typical period of physical life.

And \u003d (T fact / T n) 100%, (6.8)

where Tfact is the chronological age.

The use of formula (6.8) is relevant when calculating percentage adjustments for depreciation in compared objects (comparative sales method), when it is not possible for the appraiser to inspect the selected analogues to determine the indicators used in formula (6.7).

Example. Determine the value of the property being valued. A land plot with a building built in 1980 is being assessed. The normative life of the building is 150 years. The market value of the land plot was determined by the sales comparison method and is equal to 4.5 million rubles. The total replacement cost of the building was determined by the comparative unit method at the level of 11.4 million rubles. The assessment date is January 30, 2010.

The chronological age of the building is 30 years. To calculate the wear of the structure, we use formula (6.8), since the effective age is not given.

And \u003d (T fact / T n) 100% \u003d 30/150 * 100% \u003d 30%.

To calculate the value of the object being valued, we apply the formula 6.2.

V \u003d 4,500,000 + (11,400,000 - 0.3 * 11,400,000) \u003d 12,480,000 rubles.

Thus, the cost of the property being valued, calculated using the cost approach, amounted to 12,480,000 rubles.

Calculation of wear by splitting into types of wear

The most common depreciation calculation method is wear breakdown method.

Depending on the factors that reduce the value of real estate, depreciation is divided into physical, functional and external (economic). Physical and functional wear can be removable and irreparable. External wear is usually irreparable.

Rice. 6.2. Classification of depreciation of real estate objects

The sum of all possible types of depreciation is the accumulated depreciation of the property.

Physical deterioration reflects changes in the physical properties of the property over time (for example, defects in structural elements). Physical wear can occur under the influence of operational factors or under the influence of natural and environmental factors.

functional wear called a decrease in the value of a property associated with a discrepancy between design and planning solutions, building standards, design quality, manufacturing material, modern requirements for these positions.

External wear- this is a decrease in the value of the property due to the negative influence of the external environment in relation to the object of assessment: location, market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc.

Depreciation is considered to be removable if its elimination is physically possible and economically feasible.

Physical removable wear is determined by the cost method, calculating the cost necessary work for the replacement and improvement of individual structural elements of the building.

cost method is to determine the cost of restoring elements of buildings and structures. The cost method is used to determine the removable physical wear.

An example of calculating physical depreciation by the cost method is given in Table 6.5.

Table 6.5.

Example of calculation of removable physical wear

Eliminable physical wear according to table 6.5 is 333,500 rubles.

To calculate the physical irremovable wear usually use the expert method or the method of life.

The most accurate and most time-consuming way is expert. It involves the creation of a defective statement and the determination of the percentage of wear of all structural elements of a building or structure.

The calculation of the physical deterioration of the building as a whole will be carried out according to the formula:

And physical = ? [ I physical i I i ] (6.9)

Ifiz i - physical wear and tear of a separate i-th structural element (%);

I i - specific gravity i-th structural element;

n is the number of structural elements of the evaluated building.

The calculation of the physical deterioration of the building is given in table 6.6.

Table 6.6. Calculation of physical wear

Structural elements of the building	Share in total cost, %	actual physical element, %	The share of the physical wear of the element in the total physical wear of the building, % (Special weight of the element * *Ifiz el-ta)/100
Foundation
Walls and partitions
overlap
Roof and roof
Sanitary and electrical devices
Other works
Physical deterioration of the building

Lifetime method used to calculate the physical and physical irremovable wear, this method is discussed in detail above.

normative method.

The normative method is used to calculate physical depreciation or physical unrecoverable depreciation. If physical disposable wear is calculated, then there is no need to take into account the factors that were taken into account when calculating physical disposable wear.

Physical deterioration is determined using a breakdown of the building by components. The amount of physical depreciation of the assessed object was determined on the basis of the "Rules for assessing physical depreciation" VSN 53-86 (p). The total physical wear is determined by formula (6.9), when the weights of structural elements and the amount of physical wear of these structural elements are determined.

functional wear They call the decrease in the value of property associated with the inconsistency of design and planning solutions, building standards, design quality, manufacturing material with modern requirements for these positions.

Causes of functional wear:

• deficiencies requiring the addition of elements;
• deficiencies requiring replacement or modernization of elements;
• superimprovements.

Functional wear can be removable and irreparable. Removable functional wear is calculated most often by the cost method.

Depending on the functional wear can be determined in the following ways:

• based on excess operating costs;
• based on pair sales.

Market data are used to determine the required calculated indicators (rent rates, capitalization rates, etc.).

At the same time, the selected analogues should not have signs of functional wear identified in the object of assessment. Below is an example of calculating functional wear (Table 6.7).

Table 6.7. Calculation of functional depreciation based on losses in rent

Estimated indicators	Medium indicators by analogues	Indicators for assessed
Leased area (S), m 2
Loss coefficient from underloading (Kp), % of HP
Potential gross income, rub. in year PVD = Sar _ S
Actual gross income, rub. in year DVD = PVD _ (1 - Kp)
Net operating income, rub. in year CHOD = DVD - OR
The value of the property, rub.
The cost of the building, rub. Vsp = V _ (1 - dzu) (in these calculations, the share of the land plot is taken expertly 25%)
Functional wear, %	(3656 250 - 3178125) / 3656250= 0.13 or 13%

The functional depreciation calculation can be made on the basis of excess operating costs to maintain the building due to functional depreciation. Consider an example of calculating functional wear based on excess operating expenses in table 6.8.

Table 6.8. Example of functional depreciation calculation based on excess operating expenses

Estimated indicators	Averages by analogues	Indicators for assessed
Annual rent (Car), rub./m 2
Area rented out for rent (S), m 2
Loss coefficient from underloading, determined according to average market data (Kp), % of HPH
Operating expenses (OR), rub./m 2
Capitalization rate calculated using the market extraction method (R), %
The share of the land plot in the value of the property (dzu), %
Potential gross income, rub. per year DHA = Sar _ S
Actual gross income, rub. per year DVD = HP _ (1-Kp)
Net operating income, rub. per year CHOD \u003d DVD - OR
The value of the property, rub.V=CHOD/R
The cost of the building, rub. Vsp = V _ (1 - dzu)
Functional wear, %	(182813-164062.5)/182813=0.10 or 10%

External wear- depreciation of the object due to the negative influence of the external environment in relation to the object of assessment: location, market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. Although external wear and tear is more often unrecoverable, it can sometimes "repair itself" due to positive changes in the surrounding market environment.

The following methods can be used to assess external wear:

• based on loss in rent;
• based on excess operating expenses;
• based on pair sales;

Consider an example of determining external depreciation based on price information for recently sold similar objects (pair sales). The objects of a pair sale differ from each other only in the external wear and tear identified and correlated to the object of assessment.

Example. It is necessary to assess the external deterioration caused by the decrease in the investment attractiveness of the office building due to the relocation of a chemical plant in its immediate vicinity as part of the program for the withdrawal of manufacturing enterprises from the center of Moscow. A pair sale of objects A and B of a similar purpose was revealed on the real estate market. The cost of land in this area is about 25% of the total value of a typical property. Calculation of external depreciation by the method of paired sales in table 6.9.

Table 6.9. Example of Calculating External Depreciation Based on Paired Sales

Indicators	Value
	The selling price of object A, located far from major industrial enterprises, rubles
	Sale price of object B, located near large industrial enterprises, rubles
	The sale price of the building of object A, rubles (the share of the land plot is 25%, the share of the building is 75%).	7500000*0,75=5625000
	Sale price of the building of object B, rubles	6900000*0,75=5175000
	Difference including:
	* in cost due to physical differences between objects A and B, rubles
	* in the cost caused by the proximity of the clothing market, rubles
	Loss of value associated with the presence of an external depreciation factor, rubles
	External wear, %.	450,000/7500000=0.06 or 6%

Depreciation can be calculated in percentage terms and in value terms, depending on the chosen method.

If all types of depreciation are calculated in monetary terms, then the basic formula of the cost approach (6.2) should be used.

If various types of depreciation were calculated in value and percentage terms, then the cost of reproduction (replacement cost) is calculated by the formula:

V rev = (Vp rev - And physical devices - And fun. devices) _ (1-I physical well) _ (1-I fun.nu) _ (1 - And vn), (6.10)

And fun devices - disposable functional wear, monetary units;

And physical well - physical wear and tear, %;

And physical well - functional irremovable wear,%;

And vn - external wear,%.

When determining depreciation, the most important thing is to identify signs that reduce the value of a building. Physical deterioration is present in most buildings, however, for modern buildings in large Russian cities, there is often no external and functional deterioration. In this case, the formula is simplified to the following form:

V rev = (Vp rev - And fun. devices) _ (1-I physical well), (6.11)

Where V is the cost of reproduction;

Vp repro - the total cost of reproduction;

And physical devices - physical disposable wear, monetary units;

And physical well - physical depreciation is irreparable,%.

After calculating the full cost of reproduction (full replacement cost), as well as the accumulated depreciation, the cost of the land plot and the valued property as a whole is determined.

To determine the market value of the property, calculated within the cost approach, it is necessary to use the formula (6.1).

Assessment Methods land plots

METHODS FOR ASSESSING THE COST OF LAND PLOTS

Rice. 6.3 Land valuation methods

The valuation of land plots is carried out on the basis of the Guidelines for determining the market value of land plots, approved by the order of the Ministry of Property of Russia dated 06.03.2002 No. 568-r or on the basis of other methods presented in the educational literature, since guidelines are not binding.

Among other methods in the educational literature for calculating the cost of land use the method of reimbursement of infrastructure costs, the method of standard investment contracts.

Ministry of Education and Science Russian Federation

Federal state budget educational

institution of higher professional education

"Tula State University»

Institute of Law and Administration

Department of Finance and Management

CONTROL AND COURSE WORK

in the discipline "Evaluation of business and real estate"

on the topic:

WEAR IN EVALUATION

Made by Belova E.S.

gr. 720621

Checked by Solomykova L.V.

assistant of the department "FiM"

Tula 2014

Introduction

One of the important stages in the valuation of a property, no doubt, is to determine the degree of wear and tear. Depreciation, in its essence, is the loss of utility of the object of assessment, leading to the fact that the market value of the object becomes less than the cost of replacement or the cost of reproduction. Therefore, without determining the depreciation, the assessment of the value of the object will be incorrect, since it does not take into account the physical and functional changes that have occurred with the object during its operation, does not take into account the costs that will be required to restore the original characteristics or adapt the object to modern market requirements. The procedure for determining the depreciation of an object allows you to assess its real condition, objectively determine the period of its economic life and, importantly, correctly select analogous objects for conducting a comparative analysis and assessing the value of a real estate object.

Described above, underlines the relevance of the topic I have chosen. The main purpose of this work is to consider the problem of determining depreciation in the assessment. Achieving this goal predetermines the formulation and solution of the following tasks: description and calculation of wear, its eeconomic content, consideration various kinds depreciation, analysis of methods for assessing physical, moral and external depreciation, as well as determining their advantages and disadvantages.

1 Definition of depreciation and its economic content

Determining the degree of depreciation is an important stage in the valuation of a property, as it helps to identify its true condition, objectively determine its economic life and correctly select analogous objects for comparative analysis and valuation object.

Depreciation is a partial or complete loss of consumer properties and value, both during operation and when they are idle.

Depreciation in an appraisal is any loss of utility of an appraisal that causes the appraisal's market value to fall below either replacement cost or reproduction cost..

Depreciation is defined as the difference between the cost of reproducing improvements at the valuation date and their current market value. The economic content of depreciation lies in the fact that depreciation is classified not from the standpoint of technical feasibility, but from the point of view of their economic feasibility.. Consider the periods of life of the object of assessment and the estimated indicators characterizing them (Fig. 1)

date of construction estimate demolition of the object

Evaluation date day when no improvement is being made

Actual age to value increase

Effective age remaining economic life

The economic life of the object

the term of the physical life of the object of assessment

Figure 1 - Periods of life of the object of assessment

Let us analyze in more detail the periods of the object's life, presented in Figure 1:

• The physical life of an object- the length of time during which the object is able to actually be used for its intended purpose. Simplified, this period is determined depending on the capital group of the object in valuation practice. Acts as a natural limiter of the economic life.Physical life ends when the object is demolished.
• The economic life of the object- the time during which improvements contribute to the value of the object in excess of the cost of improvement, that is, when wear is removable.

The term can be extended due to quality service, timely modernization and repair.

In domestic practice, the economic justification technique determines the design life of a building, which is usually indicated in the passports of a typical project and a constructed facility. Based on it, the depreciation rate and the frequency of repair maintenance are established.

• Actual age- the time from the introduction of the object into operation until the date of assessment, is established according to the passport of the object or the certificate of its registration.
• Effective Age- time, which is estimated by the life expectancy of an object based on its physical condition, equipment, design, economic and other factors that affect its value.

Depending on the characteristics of the operation of the building, the effective age may differ from the physical age up or down. In the case of normal (typical) operation of the object, the effective age, as a rule, is equal to the actual one.

• Remaining economic lifeobject - the time determined by the appraiser from the moment of inspection of the object until the end of its economic life.

The depreciation of the building is due to the deterioration of its physical condition, the discrepancy between the functional characteristics of the modern ideas of the real estate market, the influence of the external conditions of the operation of the object on its value. Since these factors are interconnected, their impact on the cost is assessed comprehensively.

Under the total accumulated depreciation, appraisers understand the loss of value of the property being valued for all possible reasons.. The amount of accumulated depreciation represents the difference between the market value of the structure at the valuation date and its full replacement cost, calculated either as replacement cost or replacement cost. The cost approach considers the full replacement cost of the buildings being valued on the assumption that they are new. Therefore, having estimated the value of the total accumulated depreciation for buildings, appraisers subtract it from the indicator of the total replacement cost and, as a result, obtain the residual value of the building.

Estimated depreciation reflects the reaction of the market to certain characteristics of the property being valued, which distinguish it from a similar hypothetically newly built object at the date of valuation. The wear of objects occurs under the influence of three main causes, which can manifest themselves both in a complex and in isolation, each of the causes is the basis of the type of wear, which are considered by me in the second chapter of this work.

2 Types of wear

As noted earlier, the wear of an object is influenced by three causes (factors), which are the basis of three different types of wear:

1. Physical deterioration– Reducing the value of property due to the loss of specified consumer properties due to natural causes or as a result of improper operation. He pimplies a change in functional abilities, up to the complete destruction of the property.

Physical wear is divided into removable and irreparable. The criterion is the expediency of the costs of elimination, which cannot exceed the potential benefits calculated by the expert appraiser. The irreparable physical wear of rapidly wearing elements is determined by the engineering method (subtracting the cost of restoration work from the total cost of reproduction). Fatal physical wear and tear is determined by a combination of many factors.

Long-term elements of objects have differentservice lifedepending on the materials from which they were made and the technologies used. The technical interconnection of structures affects the performance of the entire facility as a whole. Calculations are made on the most worn out element. Objects that wear out quickly can undergo qualitative changes during the process of repeated replacements, which have some influence on the determination of the cost. The production of minor current repairs - most often serves as an exampleremovable physical wear. The costs of determining direct and indirect costs, as well as accounting for entrepreneurial profit during the restoration work of individual elements are calculated in accordance with market prices for goods and services.

1. Functional or obsolescence- decrease in the value of the property due to its inconsistency with modern market requirements for architectural, aesthetic, space-planning, design solutions, livability, safety, comfort and other functional characteristics.At the same time, there may be not only insufficient, but also excessive consumer properties, for example, excessively expensive coverage that does not correspond to the functional purpose of the property.

functional wearIt is also determined by the difference in costs when installing, for example, an air conditioning system in a building under construction or a functioning building. Reducing the cost of an object can cause a lack or excess of individual quality characteristics. These include: poor planning, excessive building density of a plot of land, inconvenient location and access to the building, the presence of redundant elements that are not involved in the functional purpose, etc.

1. External or economic depreciation -change in the value of property as a result of changes in the external environment, namely the social standards of society, legislative and financial conditions, the demographic situation, urban planning decisions, the environmental situation and other qualitative parameters.

The magnitude of external wear is significantly affected by proximity to unattractive natural or artificial objects (treatment facilities, dance floors, gas stations, railway stations, industrial enterprises).

Economic depreciation, unlike physical and moral depreciation, will always be irreversible.

For clarity, consider the types of wear in Figure 2.

Picture 2 - Types of wear and their classification

Removable is such a type of depreciation, the cost of eliminating which does not exceed the resulting increase in the value of the property. If the cost of eliminating depreciation is greater than the subsequent increase in the value of the property, such depreciation is considered irreparable.

In addition, physical wear and tear is classified

Due to causing wear on:

• Wear and tear accumulated as a result of normal use;
• Depreciation accumulated as a result of natural disasters, accidents, etc.

By flow time on:

• Continuous - a gradual decrease in technical and economic indicators;
• Emergency - fast wear in time.

Moral is classified into:

• Functional wear - wear, the cause of which is a change in the properties of products similar to this one, the reduction in the cost of their production;
• Technological wear and tear is wear and tear, the cause of which is a change in the technological cycle in which this object is traditionally included.

3 Methods for assessing wear, their advantages and disadvantages

1. Physical deterioration

The real estate and business valuation literature describes many methods for determining depreciation, but the most common are the following:

• effective age method;
• comparable sales method;
• expert method;
• breakdown method.

Effective age methodsimple in technical execution and little dependent on the state of the market, it is based on the examination of the buildings of the object of assessment and the hypothesis that the effective age is related to the typical period of economic life in the same way as accumulated depreciation is related to replacement cost. Based on this assumption, there is a formula for calculating wear:

I - wear;

EF - effective age;

EJ - economic life;

BC - replacement cost.

Advantages of the method:

1. The entire calculation is performed in one arithmetic operation;
2. BC indicator is taken from the normative documents for the operation of buildings and does not need special justification.

Disadvantages of the method:

1. All appraiser's assumptions under this method will be intuitive, which leads to his legal vulnerability.
2. The method does not give differences in the types of wear, as well as in terms of the life of individual elements of the object.

Comparison of the advantages and disadvantages of the method leads to the fact that in practice this method is almost never used.

Sales comparison methodmost often used to determine economic depreciation, and therefore its detailed description described in the third part of this chapter, which describes the methods of external wear.

expert method. The method is based on the scale expert assessments to determine physical wear and tear, set out in the Departmental regulatory documentVSN 53-86r "Rules for assessing the physical deterioration of residential buildings". The amount of wear is determined by external (visible) damage to the elements. It is this method that BTI employees use when compiling technical passports for buildings.

The formula for calculation looks like:

Ifiz = × 100%

where II - the amount of physical wear and tear of i - that element in the building, determined according to the regulatory document;

SW i - specific gravity of i - that element in the building;

i – element number.

Advantages of the method:

1. Relative ease of performing calculations;

2. The methodology for determining physical wear and tear is established by a regulatory document and is described in sufficient detail in it. The evidence part is reinforced concrete. Especially when the opinions of the BTI employee (reflected in the technical passport of the building) and the appraiser (reflected in the act of inspection of the appraisal object or in the defective statement) suddenly miraculously completely converge.

Disadvantages of the method:

1. The methodology itself provides for an accuracy of calculations of ±5%. Depreciation for a specific element can be determined, for example, at 25% or 30% - well, such a gradation - after 5%. But even this is not scary, but the significant influence of the subjective factor /

2. The magnitude of the error is inversely proportional to the experience of the evaluator. In addition, quite often there is a situation when a simple cosmetic repair hides many visible signs of wear of the main power elements of the building, which leads to a significant underestimation of the actual wear of the building as a whole.

When choosing a calculation method, very often the advantages of the method outweigh the disadvantages, and therefore this method is used by appraisers very actively.

Stakeout Method involves determining the total physical wear and tear for individual groups, taking into account the physical possibility of eliminating this wear or the economic feasibility of eliminating it:

• Correctable physical deterioration (deferred repair);
• Irreparable physical wear and tear of short-lived elements (those that can be repeatedly replaced during the operation of the building);
• Irreparable wear and tear of long-lived elements (those that form the power frame of the building and can only be restored during overhaul or renovation of the entire building).

The values ​​of irremovable wear are determined from the cost of the elements, taking into account the removable wear. The total physical wear is determined by summing up the individual types of wear. At the same time, as part of the implementation of the breakdown method, at various stages of the calculation, the cost compensation method, the chronological age method, and the expert method can be used.

Advantage of the method:

1. The method makes it possible to take into account both visible and hidden factors that cause wear of elements (for example, natural "fatigue" of materials, which manifests itself suddenly and leads to instantaneous destruction of the element).

Disadvantages of the method:

1. It is difficult to explain to the person reading your report why the estimated amount of depreciation of the building as a whole exceeds the depreciation indicated in the building inspection report (i.e. deferred repairs);
2. Quite a large amount of calculations compared to other methods;
3. The method is not applicable for conditions where there is no reliable information about the timing of repairs for short-lived elements (for example, the building was bought quite recently and the new owner simply does not have data on what and when was last repaired at the appraised object). Consequently, it becomes impossible to reasonably calculate the irremovable wear of short-lived elements using the chronological age method.

Despite big number shortcomings, this method is quite actively used in practice.

1. Obsolescence

To functional wearinclude a decrease in the value of property associated with the inconsistency of design and planning solutions, building standards, design quality, manufacturing material with modern requirements for these positions.

The amount of disposable depreciation is defined as the difference between the potential value of the building at the time of its valuation with updated elements and its value at the date of the valuation without updated elements (the difference between the cost of reproduction of the building and its replacement cost).

Functional wear can be removable and irreparable. Removable functional wear is calculated most often by the cost method.

Shortcomings that require replacement or modernization of elements are items that still perform their functions, but no longer meet modern standards (water and gas meters and fire fighting equipment). Depreciation for these positions is measured as the cost of existing elements, taking into account their physical wear and tear, minus the cost of returning materials, plus the cost of dismantling existing ones, and plus the cost of installing new elements. The cost of returning materials is calculated as the cost of dismantled materials and equipment when used at other facilities (finalized residual value).

Irremovable functional wear is caused by outdated space-planning and/or structural characteristics of the assessed buildings in relation to modern building standards. A sign of irreparable functional wear is the economic inexpediency of incurring costs to eliminate these shortcomings. In addition, it is necessary to take into account the market conditions prevailing at the date of the assessment for adequate architectural compliance of the building with its purpose.

Depending on the specific situation, the cost of irremovable functional wear can be determined in two ways:

Capitalization of losses in rent;

Capitalization of excess operating costs.

To determine the required calculated indicators (rent rates, capitalization rates, etc.), adjusted data on comparable analogues are used.

At the same time, the selected analogues should not have signs of irremovable functional wear identified in the object of assessment. In addition, the total income generated by the property complex as a whole (building and land) and expressed in rent should be divided into two components accordingly. To isolate the part of the income attributable to the building, you can use the investment balance method for the building or the method of analyzing the ratio of the value of the land to the total sale price of the property complex.

Determination of impairment caused by irreparable functional depreciation due to an outdated space-planning solution (specific area, cubic capacity) is carried out by capitalization of losses in rent.

Calculation of unrecoverable functional wear by capitalizing the excess operating costs required to maintain the building in good condition can be done in a similar way. This approach is preferable for assessing the irremovable functional depreciation of buildings that differ in non-standard architectural solutions and in which, nevertheless, the amount of rent is comparable to the rent for modern analogues, in contrast to the amount of operating costs.

3.3 External wear

External or economic depreciation- depreciation of the object due to the negative influence of the external environment in relation to the object of assessment: location, market situation, easements imposed on certain use of real estate, changes in the surrounding infrastructure and legislative decisions in the field of taxation, etc. Although external wear and tear in most cases cannot be eliminated, sometimes it can resolve itself due to a positive change in the surrounding market environment.

The following methods can be used to assess external wear:

Rent loss capitalization method;

Excess operating cost capitalization method;

Sales comparison method.

Assessment of external depreciation by the method of capitalization of losses in rent and by the method of capitalization of excess operating losses is carried out similarly to the calculation by these methods of functional depreciation discussed above. In the case of estimating external wear, it is necessary to identify losses in rent due to signs of external wear or excess operating costs due to signs of external wear.

Sales comparison methodis to identify market value accumulated depreciation of the object, by comparing its replacement cost with current prices sales of comparable properties.

Method implementation steps:

1. Selection of recent sales of objects similar to the object of assessment in terms of the nature of improvements, adjusting their prices and generating information to determine the replacement cost of the building;
2. Determining the value of a piece of land for each comparable property;
3. Determining the prices of buildings taking into account depreciation by excluding the value of land plots from the sales prices of comparable properties;
4. Calculation of the current replacement cost of the object of each of the comparable;
5. Determining the amount of accumulated depreciation of comparable buildings by subtracting their prices, taking into account depreciation, from the current replacement cost of the same buildings;
6. Determination of the average percentage of depreciation of comparable buildings for its transfer to the object of assessment.

Advantages of the methodconsists in the objectivity of its results, since by comparing sales, the appraiser only reveals the market's reaction to the aging of the property and the changing environment.

The disadvantage of the methodis the impersonality of the identified type of depreciation, that is, in the absence of the possibility of differentiation by types and types of depreciation, which limits the use of this method in real estate management. In addition, the method is quite laborious, since it requires calculations not only to compare sales, but also to determine the cost of land and the replacement cost of improving all objects.

Conclusion

Depreciation is an integral part of real estate appraisal. It contributes to an adequate determination of the real state of the object, helps to assess the remaining period of its economic life. Without the stage of determining wear and tear, the assessment of the object will be incomplete and incorrect.

In the course of writing the work, the intended tasks were solved, including by me it was determined that depreciation in the assessment is any loss of utility by the object of assessment, leading to the fact that the market value of the object of assessment becomes less than either the replacement cost or the cost of reproduction. In addition, the economic content of depreciation is analyzed, which consists in the fact that depreciation is classified not from the standpoint of technical feasibility, but from the point of view of their economic feasibility.

Analyzing the problem of determining depreciation, I identified the causes of depreciation of real estate objects, as well as their types: physical, functional or moral, external or economic.

In addition, in the course of the work, I considered the existing methods for determining wear and made sure that the correctly selected method for determining wear is of great importance in assessing an object, since each type of wear has its own specifics. After analyzing the methods for determining the assessment, I identified their advantages and disadvantages, which allowed me to conclude that the most rational and effective use of the expert method and the breakdown method, which is confirmed by existing practice.

Bibliography

1. the federal law"On valuation activities in the Russian Federation" dated July 29, 1998 No. 135-FZ
2. Kalinin V.M., Sokova S.D. Assessment of the technical condition of the building: Textbook. - M.: INFRA-M, 2010. - 268s.
3. Rules for assessing the physical deterioration of residential buildings VSN 53-86 (p), M .: Gosgrazhdanstroy, 2007.
4. Alenicheva E.V. Methods for assessing real estate objects. Tambov: Tambov Publishing House. state tech. un-ta, 2012. -335 p.
5. Yaskevich E.E. Real estate appraisal practice. Moscow: Technosfera, 2011. -504 p.
6. Real Estate Appraisal: Textbook. Second edition, ed. Drapikovsky A.I., Ivanova I.B. - ed. 2nd - B, Ega-Basma Publishing House, 2011. - 480 p.