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Appraising Community Water Well Sites

Discussion in 'Commercial/Industrial Appraisals' started by BigBlueGA, Dec 19, 2011.

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  1. BigBlueGA

    BigBlueGA Junior Member

    0
    Mar 13, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Georgia
    I've been asked to do several appraisals on small operating community well sites for one of our clients. Have looked through the Lum Library and searched the forums for info on appraising them, trying to figure out if there are any issues there that I'm overlooking that might cause an issue with competence... they are all small systems (15-40 units served) that were put in place by the developers and sold to third parties for continued operation, seems to me it would be a pretty straight forward income approach plus sales comparison.

    Not quite sure how to handle management costs though, it's not really something you can find a "manager" to handle... most of these operators collect systems and run the whole operation themselves. That's the only stumper I've come across so far. Anybody have experience with these?
     
  2. CANative

    CANative Elite Member

    69
    Jun 18, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    Assuming they are regulated in some way are their budgets and expenses a matter of public record?
     
  3. PropertyEconomics

    PropertyEconomics Elite Member

    0
    Jun 19, 2007
    Professional Status:
    Certified General Appraiser
    State:
    New Mexico
    Most of these operations are conducted by non profits if they are small systems and management is done on a volunteer basis. I would think you would be looking at the value of the going concern or a value in use ... and I dont know about your area, but in mine, the water rights would be valuable to such a degree as they would most proably hold the majority of value in the system.
     
  4. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    155
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    Water rights in the East are a little different.

    I would suggest that managing the properties is like most other outside managers...Depending on the labor involved "management" usually falls in the 5-10% of income range.
     
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