Property Management
What is 'deferred maintenance' and how does it affect Delaware investment property valuation?
AMaintenance costs deferred to next year's budget; has no effect on value
BPostponed repairs and upkeep that reduces property value and may require dollar-for-dollar deductions from the appraised value✓ Correct
CFuture maintenance reserves held in an escrow account
DTax-deferred maintenance expense in a 1031 exchange
Explanation
Deferred maintenance is the accumulation of unfixed repairs and neglected upkeep. Appraisers and buyers typically apply a dollar-for-dollar (or more) reduction from value for deferred maintenance, as it reflects physical deterioration.
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