Assessing deferred maintenance correctly: why renovation and modernisation costs are usually not deductible one-to-one

A common misconception in property valuation is that modernisation backlogs or neglected maintenance can automatically be deducted in full from the market value. In fact, what matters is not solely the calculated tradesman's costs, but the question of how the defect affects the market. A roof in need of renovation, outdated building services or a modernisation backlog do regularly reduce the value, but not necessarily by the amount of the calculated remediation costs. Buyers take into account not only the cost but also the remaining usability, the overall condition of the property and the situation on the market.

In addition, a renovation often not only remedies a defect but at the same time creates a better condition than before. In valuation terms, the principle of "new for old" therefore also plays a role. Anyone who, for example, fully renews old components not only restores the previous condition but often gains a longer remaining useful life and better marketability. In appraisals it must therefore be carefully derived which reduction in value actually applies. A flat one-to-one deduction falls short in many cases. What is always decisive is the specific market situation and the verifiable valuation of the individual property.