What is the Difference Between an Appraisal and Market Value?

What is the Difference Between an Appraisal and Market Value?
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Published By Jennifer Jewell

Question: What is the Difference Between an Appraisal and Market Value?
Answer: An appraisal is an expert assessment of a property’s worth, often for a specific purpose, while market value is the price it would fetch in an open market.

What is the Difference Between an Appraisal and Market Value?

Appraisal and Market Value, what are the differences? Appraisal of real estate is the process by which real estate agents estimate the worth or value of real estate property.

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Depreciation refers to the decrease in real estate property’s value due to either deterioration of the real estate property itself, or of its site. This can be important information if an individual intends to invest in real estate property as part of their portfolio for retirement. Depreciation costs also have tax implications because depreciation represents a loss on paper even though no money was actually spent on buying real estate. As this article explains, it can provide individuals with tax advantages depending on certain factors including the type of investor and how much and often they buy and sell real estate properties in a given year. Individuals must realize that real estate property is not an investment with quick returns, but rather a long-term investment, so real-estate needs to be thought of as part of the pool of real estate investments in their retirement portfolio. [ 1 ]

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It’s also important to take into consideration any real estate property tax increases when considering whether or not real estate will fit within your budget. It may seem like real estate taxes are low now, but if real estate values increase then real estate taxes can quickly rise and outpace other costs associated with owning real estate. The best way to seriously consider depreciation costs for real estate investors is to contact an accountant (or another financial professional) because they will know what tax factors must be taken into consideration before making decisions about real estate.

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If real estate values appreciate, depreciation cost may not be a big deal for real estate investors and they will avoid paying more real estate taxes than they need to because depreciation can offset other gains in real-estate value. Appraisal of real estate is the process by which real estate agents estimate the worth or value of real estate property. Depreciation refers to the decrease in real estate property’s value due to either deterioration of the real estate property itself, or of its site. It can provide individuals with tax advantages depending on certain factors including the type of investor and how much and often they buy and sell real estate properties in a given year. Individuals must realize that real estate is not an investment with quick returns, but rather a long-term investment, so real estate needs to be thought of as part of the pool of real estate investments in their retirement portfolio.


References

1. https://www.rocketmortgage.com/learn/appraised-value-vs-market-value

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