Formula To Calculate Depreciation For Second Hand Property?
The average lifespan of any building is around 60 years. To calculate depreciation on the second-hand property, take out the ratio of years of construction and total age of the building. The formula for calculating depreciation is the Number of years after construction: Total age of the building. The remainder of the age is the actual selling price of the property. You can add the market value of the land to arrive at the selling price.
Find Out The Basis Of Property For Calculating Depreciation On Second Hand Rental Property
While calculating depreciation for second hand property you must calculate the cost of your property. It entails the total cost of purchasing the resale unit. Property prices include registration charges, closing costs, legal fees, recording fees, transfer fees, title deeds, and holding fees are all included on the cost. Some fees are not included in the cost. These building premiums, rent for tenancy, mortgage premiums, credit score, and appraisal fees.
Separate The Cost For Calculating Depreciation On The Second-Hand Property
The land never depreciates, so you should first separate it from construction. This would help you to calculate the depreciation on the second-hand property easily. You can use the normal market value of the property at the time you bought the unit. You can also base it on the number of assessed tax values. This will give you the actual cost of construction and assess the real value of your property.
Things To Consider When Calculating Depreciation For Second Hand Property
While calculating depreciation on second hand rental property, there some important aspects that you need to consider. Sellers sometimes put inflated prices, and you should be careful while buying resale properties. The seller knows the average price of his resale unit and would be trying to gain a substantive advantage over the property.
As a buyer, it’s important to understand that you are not going to pay the sundry expenses incurred during the stay of the original owner. This would add substantially to the depreciation cost.
Importance Of Calculating Depreciation For Second Hand Property
Calculating depreciation is not a herculean task, but there are tricks to the trade. Once you calculate the depreciation on the second-hand property, you can leave some useless expenses out of the equation. Also, this measurement would help you to find the real value of your resale property and fetch a good bargain.
Understanding The Nature Of Depreciation On Turkish Second Hand Rental Property
The Republic of Turkey has witnessed a phenomenal rise in rental and resale properties. Foreigners are taking this opportunity to invest or buy property in Turkey. But before jumping on the bandwagon, it's crucial to calculate depreciation on the second-hand property. Many reputed property agents in Turkey can conduct this task for you. These agents would locate the best properties, conduct inspect, calculate the depreciation, and give you a viable price. Of course, they come with their charges, but it's worth the investment.
COVID-19 might have disturbed the real estate sector in Turkey, but the base is strong enough to hold the value. So, make 2020 your real estate investment destination in Turkey. But don't fail to calculate depreciation on the second-hand property before taking the leap.