What is the basis for depreciation tables used in appraisal?

The basis for depreciation tables used in appraisal is grounded in actual sales data tailored to property types. This approach ensures that the tables reflect real market conditions and trends, providing more accurate assessments of how different properties depreciate over time. By relying on actual sales data, appraisers can observe patterns in property values relative to their age, condition, and specific characteristics, leading to more reliable depreciation calculations.

Using sales data helps appraisers factor in the unique attributes of various property types, as different categories of real estate may exhibit different rates of depreciation based on market demand and economic conditions. This empirical approach allows for a more nuanced understanding of depreciation that goes beyond theoretical or anecdotal methods.

Other sources, such as current market rental rates, costs of past renovations, or evaluations from property inspectors, do not directly correlate to the overall depreciation of a property in the way that historical sales data does. While these factors can influence property values, they do not provide the comprehensive or systematic basis for developing depreciation tables as effectively as actual sales data.