Overcapitalization – Why doesn’t cost equal value?
If you’re new to real estate terminology, you may be wondering what overcapitalization is. Basically, overcapitalization refers to overspending on construction or renovation costs, which means that the actual cost of a property construction/renovation is higher than its actual market value. Overcapitalization is also considered asset inflation. Confused? Let’s keep it simple. For example, Mr. […]
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