Horse Farm Appraisal

[PropertyEconomics]

My longest site inspection ever, 16 hours, was on a horse farm. I dont think this assignment is a "quickie" but the true decision is that of the OP. The fee of the job I completed, as I recall, was in the range of $5,000 - $7,500 .... these jobs are not easy if well done.

Good luck.

PS ... remember Credible is the measuring stick.

 

[Terrel L. Shields]

Is this the most profitable use of the property (i.e.- an operating horse operation)...all that I have seen around here are hobby farms, incapable of making a profit. A true breeder farm, racing horse operation, training stables, etc...that's different.. This is just a very expensive hobby farm. We had one that just listed...The owner has had it for over 10 years and I aver will be lucky to get his money back. He has split the sheets and won't be able to wait 3 years like the last owner did to find a buyer. He/she will have to settle and I bet it goes at a bargain price with the barns being no more than 20% RCN contribution even though in good condition..It is a complex residential property. There is no "income" for an income approach that is not "income" by the the owner's BEV...if you train horses, the RE is not dependent upon that as "income".

 

[AnonApprsr]

It depends on the available market data. If it is ample and reliable than my fee would reflect that.

 

[The Warrior Monk]

Naturally, it depends on the market. In my area, if the development rights are intact, the HBU isn't likely going to be "as is" because of relatively high land value in the area. If there are no development rights (agricultural reserve area), the HBU could be as an equestrian facility, and the value of the property may be in the income it produces.

 

[nachocheesefries]

Most "horse farms" in my area are hobby farms with no income....I am appraising one now...4,000 sf house, riding area and 7 stall barn....there are plenty of sales of similar type properties....

Now 50+ stall barns would be a little different...I would make sure you had a good grasp of the HBU. IMO, it could still just be an over improved hobby farm.

 

[CATHY ZACCARDELLI]

Wow, so glad I posted. All of your comments have helped me. Now, the agent calls and wants me to do a BPO for the court (tax lien involved here too). I am a licensed broker as well, but do not feel that a BPO is not an appropriate valuation tool.

 

[David Mescon]

The extent of the improvements beg the question of a multitude of possible commercial uses. The barn might be used for boarding, and depending upon their physical configurations, one or both of the arenas might be suitable for use for a wide variety of events. You didn't mention anything about quality - would this be considered world class, or just average. Is there a hot walker? A vetrinary facility? Extensive corrals? Lots of questions, but few answers. I personally, would be loath to consider such extensive equstrian improvements as being ancillary to a residential use, but hey, maybe your market is different...

 

[DMZwerg]

Most "horse farms" in my area are hobby farms with no income....I am appraising one now...4,000 sf house, riding area and 7 stall barn....there are plenty of sales of similar type properties....

Now 50+ stall barns would be a little different...I would make sure you had a good grasp of the HBU. IMO, it could still just be an over improved hobby farm.

Just a semi-ignorant CR here but again I would look at the size of the facility, number of stalls, and present/past usage and likely make that call that with a 52 stall facility (with 4 other good sized barns/sheds) is likely a commercial type operation. I have seen 8-12 stall operations where rental stall space occurred but was still incidental to personal hobby farm use, but at 52 stalls that would be clearly a commercial or more intensive agricultural use and I would not consider doing it on just a CR license.

Hope the comment of an naive bystander helps some

 

[George Hatch]

No matter how you cut it this is a high exposure assignment for anyone who has never previously appraised such a property. Even moreso if somebody is contemplating submitting it to the state for tax assessment-related uses.

Here's a relevant war story
I just got a call a month ago from a Certified Res appraiser who had been doing commercial appraisals for hard money lenders for the last 20 years. One of those appraisals got submitted to the County Assessor's office for a property tax dispute and they sent it straight to the state board based on some deficiencies. Because the complaint had been submitted by another state government agency the appraisal board fast tracked their investigation.

Now this was an off-label use of the appraisal report, which I think might have saved the appraiser. The value wasn't too far out of line but this person simply didn't have the training or experience in appraising such non-res properties properly. Based on what I saw my recommendation was that they admit to the shortcomings and take the deal being offered by the state. They didn't get revoked but they did get fined. Going forward there won't be any more second chances for this appraiser.

Forewarned is forearmed.

 

[Financially Feasible]

No matter how you cut it this is a high exposure assignment for anyone who has never previously appraised such a property. Even moreso if somebody is contemplating submitting it to the state for tax assessment-related uses.

Here's a relevant war story
I just got a call a month ago from a Certified Res appraiser who had been doing commercial appraisals for hard money lenders for the last 20 years. One of those appraisals got submitted to the County Assessor's office for a property tax dispute and they sent it straight to the state board based on some deficiencies. Because the complaint had been submitted by another state government agency the appraisal board fast tracked their investigation.

Now this was an off-label use of the appraisal report, which I think might have saved the appraiser. The value wasn't too far out of line but this person simply didn't have the training or experience in appraising such non-res properties properly. Based on what I saw my recommendation was that they admit to the shortcomings and take the deal being offered by the state. They didn't get revoked but they did get fined. Going forward there won't be any more second chances for this appraiser.

Forewarned is forearmed.

To the OP - listen to this post. Enough said.