Normal Wear and Tear

Real Estate Investing Glossary – Malone Global University

Definition

Normal wear and tear is the expected, gradual deterioration of a rental unit or property that occurs from ordinary use over time. It is different from damage, which is deterioration caused by negligence, abuse, misuse, or unauthorized alterations.

This distinction matters because many landlord-tenant rules (and most leases) allow a landlord to charge for damage but not for normal wear and tear when accounting for a tenant’s security deposit.

Why It Matters

Normal Wear vs. Damage

The line depends on severity, cause, and time in possession. A helpful test is: “Would this likely happen with responsible use?”

Common examples of normal wear and tear

Common examples of damage

How Operators Handle It

Underwriting Implications

In underwriting, normal wear and tear is part of routine operating expense and turn cost assumptions. If a property has high turnover, older finishes, or heavy resident traffic, expect higher make-ready costs and faster replacement cycles — even with excellent property management.

Common Pitfalls

Related Terms

Back to Glossary