Kaushik 06 January 2021
Dear Experts,
If the current price of a brand new 850 sq. ft. apartment in a gated society is a 100 bucks ,
then what would the approximate current price of the same apartment be, in real terms after calculating depreciation,
if it were to be 25 years old?
Kaushik.
Rama chary Rachakonda (Secunderabad/Telangana state Highcourt practice watsapp no.9989324294 ) 06 January 2021
The cost method: Where the current cost of construction of the building is estimated and then the current cost is reduced by the depreciation according to the age of the building. To this depreciated value of the building, the price of the side is aggregated to arrive at the valuation of the property.
-In case of an independent house, the total useful age is estimated to be about 60 years. Suppose you are selling it after 20 years of construction, selling price of the building minus depreciation is arrived at by this simple formula- Number of years after construction/ Total (useful) age of the building.i.e. 20/60 = 1/3 is the ratio
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