Real Estate Appraisal Forum

appraisersforum.com logo
The Premiere Online Community for Real Estate Appraisers!
 Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
 
 
Go Back   Appraisers Forum > Real Estate Appraisal Forums > Commercial/Industrial Appraisals
Register Help Our Rules Calendar Archives Mark Forums Read


Closed Thread
 
Thread Tools
  #1  
Old 10-10-2011, 02:33 PM
HornedFrog08 HornedFrog08 is offline
 
Join Date: Apr 2011
State: Texas
Professional Status: Appraiser Trainee
Posts: 31
Default Appraisal of Special-Use Deed Restricted Properties

I am a property tax consultant. We have a property that is deed restricted as a golf course. According to the tax code the land itself is to be appraised based on the deed restricted value. There are no other special-use golf course properties in this county to compare it to. We have a good idea of what market value is. Any ideas on the best way to determine what its deed restricted value or a formula to do so?

I thought the best method would be to find other properties with the special-use deed restrictions. Then compare that property's land value per acre to the market price per acre in that area and come up to a percentage to apply to our subject property. Any ideas or suggestions?
Sponsored Links

  #2  
Old 10-10-2011, 02:43 PM
George Hatch's Avatar
George Hatch George Hatch is offline
 
Join Date: Jan 2002
Location: Carlsbad, California
State: California
Professional Status: Certified General Appraiser
Posts: 16,620
Default

The deed restriction element relates to the "legally permissible" criterion in the highest and best use analysis. It's similar in nature to a zoning designation or general plan designation or recorded subdivision or condo map that limit the types of potential uses.

It is the end result of that "use" analysis that counts, not the deed restriction itself. If you have other parcels with a similar highest/best use, regardless of the specific elements leading to that conclusion, those would be your best comparables.
  #3  
Old 10-10-2011, 02:44 PM
Walter Kirk Walter Kirk is offline
 
Join Date: Jun 2003
Location: Audubon, N.J.
State: New Jersey
Professional Status: Licensed Appraiser
Posts: 4,395
Default

If you can't find similar deed restricted properties (and I imagine that they are very rare) you should look at sales of similar golf courses which remained golf courses.
  #4  
Old 10-10-2011, 03:03 PM
HornedFrog08 HornedFrog08 is offline
 
Join Date: Apr 2011
State: Texas
Professional Status: Appraiser Trainee
Posts: 31
Default

we have considered that approach. However, the texas property tax code states that the property will be valued based on the restriction that it must remain a golf course for the next 10 years. We considered sales of other golf courses and we do have one. Although none of them have the deed restriction requiring them to remain a golf course for the next ten years like our property does. How would you discount that value to account for losing that bundle of rights for the next ten years?
  #5  
Old 10-10-2011, 03:08 PM
Michigan CG's Avatar
Michigan CG Michigan CG is offline
 
Join Date: Nov 2006
State: Michigan
Professional Status: Certified General Appraiser
Posts: 17,396
Default

Quote:
Originally Posted by HornedFrog08 View Post
......How would you discount that value to account for losing that bundle of rights for the next ten years?
How do you know there is a discount? What is the Highest and Best Use of the property? Do you foresee it changing?
__________________
You do not know what you do not know.
  #6  
Old 10-10-2011, 03:40 PM
PropertyEconomics's Avatar
PropertyEconomics PropertyEconomics is offline
 
Join Date: Jun 2007
Location: Central New Mexico
State: New Mexico
Professional Status: Certified General Appraiser
Posts: 18,855
Default

My question is what bundle has been lost? What is the highest and best use of the land today? What happens at the end of the ten year period? What are the chances for continuation of use of the property as a golf course and what are the chances of a change of use to something alternative?

More questions than answers at this point because there are questions that require answer before an answer to the original question can be offered.
__________________
Foxtrot, Uniform, Charlie, Kilo Cancer ... In memory of our friend Bill Waite!
  #7  
Old 10-10-2011, 04:28 PM
HornedFrog08 HornedFrog08 is offline
 
Join Date: Apr 2011
State: Texas
Professional Status: Appraiser Trainee
Posts: 31
Default

This is a member owned course in operation since 1934. However not a wealthy club by any means, its a real "country" club. They were roughly $25,000 in the red last year. Though due to the significant improvements to convert it from cow pasture to golf course I would think though that the highest and best use would be for it to continue operating as a golf course. This is not a rapidly developing part of the state so there is not a great deal of demand for land>

However, what if enough of the members can not afford higher monthly dues and/or they can not bring in more outside business (which must have been a problem)? They can not operate in the red forever. Now due to deed restriction they can not sell to just anyone.
  #8  
Old 10-10-2011, 04:29 PM
HornedFrog08 HornedFrog08 is offline
 
Join Date: Apr 2011
State: Texas
Professional Status: Appraiser Trainee
Posts: 31
Default

tax code says that to be appraised as a special use property it must be deed restricted to that use for a period of at least ten years
  #9  
Old 10-10-2011, 04:33 PM
Michael S Michael S is offline
 
Join Date: Mar 2009
Location: Albuquerque
State: New Mexico
Professional Status: Certified General Appraiser
Posts: 1,084
Default

If the HBU of the property is a golf course, and if that isn't likely to change in 10 years, there is probably no discount.

I've heard of some golf courses where the HBU is to shut down the golf course and sell off the water rights. I'm guessing this golf course is part of a residential development? That seems like the most likely reason for the deed restriction, the developer wanted to make sure there would still be a golf course while they were selling houses.
  #10  
Old 10-10-2011, 04:37 PM
PropertyEconomics's Avatar
PropertyEconomics PropertyEconomics is offline
 
Join Date: Jun 2007
Location: Central New Mexico
State: New Mexico
Professional Status: Certified General Appraiser
Posts: 18,855
Default

Hard to imagine in this economic climate there is a great deal of demand for large scale water rights ...
Also WHO is in control of the golf course at the end of 10 years????
__________________
Foxtrot, Uniform, Charlie, Kilo Cancer ... In memory of our friend Bill Waite!
Sponsored Links

Closed Thread


Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

vB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Forum Jump




Copyright © 2000-, AppraisersForum.com, All Rights Reserved
     Terms of Use  Privacy Policy
AppraisersForum.com is proudly hosted by the folks at AppraiserSites.com

Fastest Way to Find a Real Estate Appraiser Enter Zip Code:
Partner Sites:
AppraiserUSA.com - National Appraiser Directory AllDomainsUSA.com - Domain Name Registration
DeadbeatListings.com - Deadbeat ListingsAppraiserSites.com - Web Hosting for the Professional Real Estate Appraiser
Find FHA Appraisers - FHA Appraiser Search Commercial Appraisers - Commercial Appraiser Search
Relocation Appraisal - Find Relocation Appraisers Domain Reseller - Business Opportunity
Home Security Buzz - Home Security Info Radon Testing - Radon Gas Info
My Medicare Forum - Medicare Info Stop Smoking Help - Help Quitting Smoking
CordlessPhoneStore.com - Great Cordless Phones AndroidTabletCity.com - Android Tablet Computers

Follow AppraisersForum.com:          Find us on Facebook            Follow us on Twitter


All times are GMT -5. The time now is 06:58 AM.

SiteMap: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 61, 62, 63, 64, 65, 66, 67, 68, 69, 70, 71, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81, 82, 83, 84, 85, 86, 87, 88, 89, 90, 91, 92, 93