Selected Aspects of Determining of Building Facility Deterioration for Real Estate Valuation

Abstract

Deterioration of real estate and forecast of the remaining period of its service life are important parameters for the real estate valuation process. In the literature we can find several formulas which determine the deterioration degree depending on the period length of building facility service life. However, as shown by the analysis conducted in this paper, the authors obtained the mixed results depending on the taken approach. Thus, the following questions arise: what to look for when choosing a formula and what degree of risk is associated with the determination of the deterioration degree. It is well-known that the deterioration is influenced by many factors. However for its determination it is required knowledge about its course, character and period of previous service life, carried out repairs, major repairs and modernizations, as well as used materials and durability of a building facility. From the perspective of the analyzes, it seems appropriate to take further researches towards developing of a procedure that will allow to select one of the available formulas, due to the pre-determined parameters (e.g. the quality of building facility maintenance).