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Old 12-19-2011, 03:34 PM
BigBlueGA's Avatar
BigBlueGA BigBlueGA is offline
Join Date: Mar 2002
Location: Southeast Georgia
State: Georgia
Professional Status: Certified General Appraiser
Posts: 406
Default Appraising Community Water Well Sites

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?
"Under quality of construction the appraiser graded it as 'Great'."
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Old 12-19-2011, 07:44 PM
CANative's Avatar
CANative CANative is offline
Join Date: Jun 2003
Location: Ukiah, CA
State: California
Professional Status: Certified Residential Appraiser
Posts: 47,245

Assuming they are regulated in some way are their budgets and expenses a matter of public record?
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Old 12-19-2011, 08:15 PM
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PropertyEconomics PropertyEconomics is offline
Join Date: Jun 2007
Location: Central New Mexico
State: New Mexico
Professional Status: Certified General Appraiser
Posts: 18,855

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.
Foxtrot, Uniform, Charlie, Kilo Cancer ... In memory of our friend Bill Waite!
Old 12-23-2011, 11:35 AM
Terrel L. Shields's Avatar
Terrel L. Shields Terrel L. Shields is offline
Join Date: May 2002
Location: Springtown, AmeRica
State: Arkansas
Professional Status: Certified General Appraiser
Posts: 40,704

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.
"Bigamy is having one wife too many. Monogamy is much the same." Oscar Wilde
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