Is An Over-Improvement Functional Obsolescence?
Yes, an over-improvement can functional obsolescence. Over-improvement occurs when a property is improved to a level that is significantly higher than the average improvement level in the surrounding area. This can often lead to functional obsolescence, where the property can no longer compete with other properties in the area.
Over-improvement is often the result of a lack of understanding of the local market. Investors may mistakenly believe that they can charge higher rents or sell the property for more than what is realistic. For example, a property may be renovated to the point where it no longer meets building standards or cannot accommodate handicap accessibility.
In summary, over-improvement is normally only a concern in the very early stages of a property’s life. Properties that have been owned for some time are unlikely to experience functional obsolescence caused by over-improvement.
Functional obsolescence can be caused by over-improvement in a number of ways:
First, if a property is improved to a degree that is beyond the level of improvements made to neighboring properties, it can create functional obsolescence. Often, investors do not have a complete understanding of the market in which they are investing and believe that if they make a superior property, it will be more successful.
In addition to over-improvement causing functional obsolescence, other factors are also important. For example, improved properties may result in additional traffic or noise from renovation work or the property itself.
This can lead to functional obsolescence by making the property less desirable because of the inconvenience to neighbors. Or perhaps extra landscaping is required due to new construction that is easily noticeable by neighbors, so they no longer desire to live next door as functional obsolescence occurs.
What Can Result From Functional Obsolescence?
Functional obsolescence is a state in which a product or service can no longer perform its intended function. This can lead to financial losses for the company, as they are unable to generate revenue from the sale of the product or service. In other cases, functional obsolescence can lead to the company or individual incurring additional costs.
For example, if a company has invested in a new product or service and it fails to meet market demand, it may have to allocate additional funds for the failed product or service. Or, if a company has invested in infrastructure for use with a new product or service, there may be additional costs related to that infrastructure.
Another consequence of functional obsolescence can be the loss of market share. If a company cannot compete with other companies offering similar products, it will likely lose market share. This could lead to financial difficulties based on lost revenue. In addition, the inability to compete can mean that the original investment made by the company will not reap as much profit as expected. This is especially true if the company has invested additional funds into the failed product or service.
What Is The Total Curable Functional Obsolescence?
Total curable functional obsolescence refers to the portion of a building’s obsolescence that can be remedied through repair, renovation, or other means. This type of obsolescence is often caused by changes in technology, fashion, or other trends that make a structure appear outdated.
While the total cost of curing functional obsolescence can be significant, it is often less than the cost of demolishing and rebuilding the structure. The total curable functional obsolescence is the sum of the following components:-
– Construction & Building Repair Functional Obsolescence
– Non-Const. & Building Alteration Functional Obsolescence
– Additions and Remodeling Functional Obsolescence”
Functional obsolescence is not just a problem with buildings, it also affects many other parts of our everyday lives. For example, it is estimated that 40% of the food produced for consumption in the United States is wasted because people do not want to eat older food.
The amount of functional obsolescence also affects clothing. Approximately 20% of clothing purchases are never worn even once by the owner and go directly from store shelves to landfills.
It is estimated that if all of that clothing had been thrown away, it would have an annual value of $500,000. With that money, the owner could have purchased six new jobs.”
What Are The Two Categories Of Incurable Functional Obsolescence?
There are two primary categories of incurable functional obsolescence: technological and economic. Technological obsolescence occurs when a product or technology is no longer supported or compatible with newer technologies.
For example, a product that uses an outdated operating system or software may be unable to run on newer devices or may be unable to take advantage of newer features.
Economic obsolescence occurs when a product is no longer economically viable to produce or maintain. For example, a product may be too expensive to produce relative to its competitors or may require too much maintenance relative to its lifespan.
The two main components of economic obsolescence are the cost of ownership and the cost of production. Economic obsolescence often reflects changes in fashion, technology, and quality.
Which Is An Example Of A Loss In Value To The Subject Due To Functional Obsolescence?
There are many examples of loss in value to the subject due to functional obsolescence. One example is when a subject’s value is diminished because it can no longer perform its original function.
This can happen when a piece of equipment can no longer be used for its original purpose or when a building is no longer able to be used for its original purpose.
Another example is when a subject’s value is diminished because it can no longer be used in the same way as it could before. This can happen when a piece of equipment can no longer be used in the same way it could before or when a building is no longer able to be used in the same way it could before.
The next example is when a subject’s value is diminished due to removing a feature vital to its operation. This can happen when a piece of equipment can no longer perform its original function without removing a feature that was vital to its operation or when a building can no longer be used in the same way it could before.
The fourth example is when a subject’s value is diminished because it cannot be repaired or maintained as it once could. This happens with items like vehicles and homes, where parts are no longer available or can only be repaired at an increased cost.