Property Management

What is 'functional obsolescence' in the context of Rhode Island rental property?

APhysical wear and tear from tenant use
BA loss in rental value or desirability due to outdated features, poor design, or inefficient layouts that are less appealing to today's tenants✓ Correct
CThe legal obsolescence of a lease
DLoss of value from a declining neighborhood

Explanation

Functional obsolescence in rental property results from outdated features (old appliances, poor floor plans, inefficient systems) that make the property less competitive with newer properties, potentially resulting in lower rents or higher vacancy.

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