Finding problems like leaking faucets and faulty electrical outlets is an example of which type of depreciation?

The scenario described, involving a leaking faucet and faulty electrical outlets, falls under curable depreciation. This concept refers to situations where the costs of repair or improvement can be justified by the increase in property value that those repairs would create. In this case, both issues are defects that can be fixed, meaning that their negative impacts on the property's overall value can be addressed through appropriate maintenance or upgrades.

If the repairs to the leaking faucet and faulty electrical outlets are relatively low in cost compared to the improved conditions and increased value of the property post-repair, this suggests a situation where the depreciation can be cured. It highlights a property that may have physical issues affecting its condition, yet these issues can be resolved through easy fixes, making any associated depreciation temporary and manageable.

The other options pertain to different contexts of depreciation. Functional obsolescence refers to a loss in value due to design inefficiencies that cannot be rectified. Physical depreciation, while closely related, typically encompasses wear and tear and deterioration not easily fixable or leading to further costs without necessarily adding value back to the property. Economic obsolescence involves external factors that decrease a property's value beyond the owner's control, such as changes in the neighborhood or economic downturns.