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The depreciation rate is the rate at which the value of a property declines each year....

The depreciation rate is the rate at which the value of a property declines each year. Would you expect the depreciation rate on rental property to be higher or lower than that for owner-occupied property? Explain.

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The depreciation rate of on a rental property is expected to be higher than that for owner-occupied property. Depreciation refers to the loss in value of a property with time due to normal wear and tear. Therefore, when a property is used in a more careful way and when it undergoes better maintenance, the depreciation rate of the property is expected to be low. A rental property is less likely to be used well and maintained periodically than an owner-occupied property. So, the depreciation rate of on a rental property is expected to be higher than that for owner-occupied property.

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