Normal Wear-And-Tear

DEFINITION of 'Normal Wear-And-Tear'

The inevitable physical decline of the condition of a property from time and usage. Normal wear-and-tear increases over the useful life of any property or asset. It results from normal usage by its occupants as well as from weather and other natural forces that surround it.

BREAKING DOWN 'Normal Wear-And-Tear'

Normal wear-and-tear cannot be avoided, only slowed in various ways through maintenance. Of course, this can reduce the value of the property over time, although not enough to prevent the owner from making a profit on the sale in most cases. In terms of landlords and tenants, normal wear-and-tear may or may not be deducted from the damage deposit. This usually depends on the nature of the lease and the period of time that the tenant rented the property for.


For corporate properties, wear-and-tear is factored into depreciation.

RELATED TERMS
  1. Property Management

    The administration of residential, commercial and/or industrial ...
  2. Gross Lease

    A type of commercial lease where the landlord pays for the building's ...
  3. Property Manager

    An individual or company responsible for the day-to-day functioning ...
  4. Double Net Lease

    An agreement in which the tenant is responsible for both property ...
  5. Betterment Insurance

    Betterment insurance refers to insurance coverage that a tenant ...
  6. Investment Property

    A real estate property that has been purchased with the intention ...
Related Articles
  1. Personal Finance

    The Complete Guide To Becoming A Landlord: Hiring A Property Manager

    A property manager can perform such duties as marketing your rental property, selecting tenants, maintaining the property, creating budgets and collecting rent. You may consider hiring a property ...
  2. Retirement

    Could Being a Landlord Pay for Your Retirement?

    If you have the money to buy them and the energy to run them – or the funds to pay a good manager – rental properties can help pay for your retirement.
  3. Personal Finance

    How Does Depreciation Reduce My Tax Bill?

    How the depreciation tax rule can assist real estate investors.
  4. Personal Finance

    The Complete Guide To Becoming A Landlord: Becoming A Landlord

    Financial BenefitsAs a landlord, you have the opportunity to earn income from your real estate investment. While your property ideally appreciates in value over time, the income that you receive ...
  5. Managing Wealth

    How Rental Property Depreciation Works

    It's a bit tricky, but a valuable tool to make your investment pay off.
  6. Personal Finance

    Investing In Property Out Of State

    If you can't afford property close to home, consider taking the real estate plunge elsewhere in the country.
  7. Personal Finance

    The Complete Guide To Becoming A Landlord: Finding Tenants

    A challenge that most landlords face is finding reliable tenants to fill their rental properties. Ideally, a tenant will be willing and able to pay his or her rent in full and on time each month, ...
  8. Personal Finance

    Sell Your Rental Property For A Profit

    Being a landlord can be taxing, especially when you want to sell. Find out how to reduce your burden.
  9. Investing

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
  10. Trading

    Use Real Estate To Put Off Tax Bills

    Find out how you can build wealth and reduce your taxes.
RELATED FAQS
  1. How does securitization play a role in the implementation of PACE financing?

  2. Do I have to pay capital gains tax on commercial property?

    I am retired and living on a fixed income. When selling a piece of commercial property, do I have to report and pay capital ... Read Answer >>
  3. What are the differences between single, double and triple-net leases?

    Learn the ins and outs of net lease agreements, including the key differences between single net, double net and triple net ... Read Answer >>
  4. What are the three "nets" of an NNN lease?

    Learn what the three "nets" are in an NNN lease and how they affect the responsibilities of both landlord and tenant in a ... Read Answer >>
  5. What criteria does a property need to meet to be considered an 'investment grade' ...

    Learn what it takes for institutional investors to consider a property "investment grade," such as real estate investment ... Read Answer >>
  6. What do states do with unclaimed property?

    Understand what unclaimed property is and what types of property can be considered abandoned or unclaimed. Learn what states ... Read Answer >>
Hot Definitions
  1. Bond Ladder

    A portfolio of fixed-income securities in which each security has a significantly different maturity date. The purpose of ...
  2. Duration

    A measure of the sensitivity of the price (the value of principal) of a fixed-income investment to a change in interest rates. ...
  3. Dove

    An economic policy advisor who promotes monetary policies that involve the maintenance of low interest rates, believing that ...
  4. Cyclical Stock

    An equity security whose price is affected by ups and downs in the overall economy. Cyclical stocks typically relate to companies ...
  5. Front Running

    The unethical practice of a broker trading an equity based on information from the analyst department before his or her clients ...
  6. After-Hours Trading - AHT

    Trading after regular trading hours on the major exchanges. The increasing popularity of electronic communication networks ...
Trading Center