Hello,

To experienced investors: What would be an average apartment resale cost depreciation in the following number of years:

1) 5 years
2) 10 years
3) 20 years
4) 30 years

Will the maintenance cost increase with factor of time ? If yes, then with what extent ?

If i purchase the apartment, what would be my resale window, assuming average case scenario.

Thanks !
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  • This is what govt tax rules says on constructed building depreciation:

    Age of the Building Depreciation
    If the age of the Building:
    1.Does not exceed Five years 10%
    2.Exceeds Five years but does not exceed Ten Years 15%
    3.Exceeds Ten years but does not exceed Fifteen years 20%
    4.Exceeds Fifteen years but does not exceed Twenty years 25%
    5.Exceeds Twenty years but does not exceed Twenty-Five years 30%
    6.Exceeds Twenty-Five years but does not exceed Thirty years 35%
    7.Exceeds Thirty years but does not exceed Thirty-Five years 40%
    CommentQuote
  • @rohitsri: If you are considering resale value then you need to factor in the appreciation in land value in addition to depreciation of building value alone.
    Invariably the land value appreciates faster and outpaces the depreciation in building value and that is why any day when you invest in an apartment the value appreciates but never depreciates!
    What may vary is the extent to which it appreciates over years. This is dependent on which stage of the property you enter.
    panditpradeep@yahoo.com
    CommentQuote
  • Assuming 300 plots, in 4 acres of land , per person land is about 580 sq feet.
    Cost of apartment: 60 Lakhs. , Total cost after 10 years assuming a loan of 40 lakhs for 10 years, 10.25% interest: 84 Lakhs.

    Assuming land is 1/3 of the cost (Delhi case):
    1/3 of 60 = 20.
    Assuming 300% appreciation in 10 years, from current levels:
    60 lakhs.
    Assuming 15% construction cost depreciation:
    Construction cost: (60-20) = 30 , 15% less =~ 25 Lakhs

    Total appreciated price after 10 years: 85 Lakhs

    Total amount paid in 10 years: 84 Lakhs
    Total profit in 10 years: (85 - 84) = 1 Lakhs

    And I have not added furniture cost etc which will be at least 3-4 lakhs.
    Cost of apartment: 60 Lakhs. , Total cost after 10 years assuming a loan of 40 lakhs for 10 years, 10.25% interest: 84 Lakhs.

    Assuming land is 1/3 of the cost (Delhi case):
    1/3 of 60 = 20.
    Assuming 300% appreciation in 10 years, from current levels:
    60 lakhs.
    Assuming 15% construction cost depreciation:
    Construction cost: (60-20) = 30 , 15% less =~ 25 Lakhs

    Total appreciated price after 10 years: 85 Lakhs

    Total amount paid in 10 years: 84 Lakhs
    Total profit in 10 years: (85 - 84) = 1 Lakhs

    And I have not added furniture cost etc which will be at least 3-4 lakhs.
    Cost of apartment: 60 Lakhs. , Total cost after 10 years assuming a loan of 40 lakhs for 10 years, 10.25% interest: 84 Lakhs.

    Assuming land is 1/3 of the cost (Delhi case):
    1/3 of 60 = 20.
    Assuming 300% appreciation in 10 years, from current levels:
    60 lakhs.
    Assuming 15% construction cost depreciation:
    Construction cost: (60-20) = 30 , 15% less =~ 25 Lakhs

    Total appreciated price after 10 years: 85 Lakhs

    Total amount paid in 10 years: 84 Lakhs
    Total profit in 10 years: (85 - 84) = 1 Lakhs

    And I have not added furniture cost etc which will be at least 3-4 lakhs.
    CommentQuote