Which type of depreciation is related to a property’s aging and regular use?

Physical depreciation refers to the decline in a property's value due to wear and tear from aging and regular use. This type of depreciation arises from the physical deterioration of the property over time, which can include factors such as weather exposure, lack of maintenance, and general aging of the building materials.

As a property undergoes regular wear, its structural components may not function as efficiently as they once did, leading to a decrease in overall value. Assessors quantify this type of depreciation by evaluating the property's current condition relative to the original condition at the time of construction or renovations. Understanding physical depreciation is crucial for accurate property assessments and determining fair market value, especially for properties that have been in use for several years.

In contrast, other forms of depreciation, such as functional obsolescence or economic obsolescence, relate to factors like property layout inefficiencies or changes in the surrounding market conditions rather than the physical aging process.