Contributory Value
Definition of 'Contributory Value'The value contributed by a component or part to the total value of the whole. Contributory value is most commonly used in real estate to refer to the contribution made by a particular feature or component to the value of the whole property. The concept of contributory value comes from the field of value theory. |
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Investopedia explains 'Contributory Value'Different features in real estate may have vastly differing contributory values. The contributory value of a backyard deck may be well below that of a secondary suite with a full kitchen. Contributory values may also be dependent on buyer preferences and the state of the economy.For example, the pool in the backyard may have a contributory value of $10,000 for a family with teenage children, but may have scant contributory value for a family with toddlers. Likewise, enhancements such as granite countertops in the kitchen and state-of-the-art appliances may be a significant contributor to value in a red-hot real estate market, but their contributory value may be diminished in a sluggish housing market. |
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