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- September 6, 2022
- Real Estate
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THINGS TO NOTE CONCERNING OUTMODEDNESS IN FACILITIES/ PROPERTIES/COMMERCIAL REAL ESTATE
- Outmodedness is the term used to describe a facility/property/real estate that is out of fashion and no longer in line with market requirement.
- Outmodedness can be grouped under curable and incurable functional outmodedness. The curable implies that the facility can be fixed or renovated whiles the incurable implies that it cannot be fixed or renovated to meet the current market demand. An example of an incurable functional outmodedness is an outdated architectural design of a facility/structure which requires complete refurbishment. For the curable one, it requires repairing a very small portion or insignificant portion of the structure to meet current demands of clients in the real estate market.
- Outmodedness takes into account the COST BENEFIT ANALYSIS (CBA) of a facility. This means that one must calculate or find out whether it is worth refurbishing the facility or demolishing the entire structure to build a new one to meet current market demand. This will be dependent on the cost involved or resources available to the investor.
- Since outmodedness is of essence to the real estate investor, knowing the risk that it brings to him/her, there is the need for him/her to consult or work with well experienced construction firms (e.g., FNC Projects Ltd) and the resources needed to address it.