Form 1025 Gross Monthly Rent and Income Approach

[The Scholar]

I'm appraising a duplex in a rural area and have a total of 3 comparable sales available which are 2 years old and were private non-MLS transactions. Any suggestions on how to fill out Gross Monthly Rent if I don't know what they were renting for at time of sale? Can I use present day estimated rents? Is it 100% necessary to do an income approach?

 

[Dublin ohio]

You could always use current market rents and sales. But in my experience. Trying to come up with a credible GRM in a rural market is just about hopeless. Just not enough reliable data. YMMV

 

[Bobby Bucks]

You may be able to determine it by proxy, it's an acceptable method per the AI.

 

[The Scholar]

You may be able to determine it by proxy, it's an acceptable method per the AI.

What's your definition of "by proxy"?

 

[The Scholar]

You could always use current market rents and sales. But in my experience. Trying to come up with a credible GRM in a rural market is just about hopeless. Just not enough reliable data. YMMV

What would I enter in the Gross Monthly Rent field...UNKNOWN?

 

[Dublin ohio]

What would I enter in the Gross Monthly Rent field...UNKNOWN?

What is the option. Either attempt to do it by proxy as Bobby suggests or ?. It is what it is. What are the odds that the typical buyer of a rural duplex is looking at a GRM. Probably using the old "rule" of a "100" GRM

 

[Bobby Bucks]

What's your definition of "by proxy"?

I use this method occasionally with rural properties when there is no recent rental data. I locate 3 or 4 properties that are presently rented. Then find 3 or 4 sold properties that are similar to the rentals in condition, quality, GLA, etc and adjust differences. I then use the amount the properties sold for and assign rents to the sold property by proxy. I’ll probably get flamed for bastardizing an acceptable method. You'll probably get a better suggestion than mine by the end of today.

 

[Dublin ohio]

I use this method occasionally with rural properties when there is no recent rental data. I locate 3 or 4 properties that are presently rented. Then find 3 or 4 sold properties that are similar to the rentals in condition, quality, GLA, etc and adjust differences. I then use the amount the properties sold for and assign rents to the sold property by proxy. I’ll probably get flamed for bastardizing an acceptable method. You'll probably get a better suggestion than mine by the end of today.

I have done the above more than once. Never had a pushback. I can't think of another "better" method. Unless PFA is considered "better".

 

[Bobby Bucks]

I have done the above more than once. Never had a pushback. I can't think of another "better" method. Unless PFA is considered "better".

Although it seems to work best with rural properties, I’ve also found it useful for any property that lacks similar recent rental data….. it could be new construction, waterfront, excessive acreage, etc.

 

[The Scholar]

I use this method occasionally with rural properties when there is no recent rental data. I locate 3 or 4 properties that are presently rented. Then find 3 or 4 sold properties that are similar to the rentals in condition, quality, GLA, etc and adjust differences. I then use the amount the properties sold for and assign rents to the sold property by proxy. I’ll probably get flamed for bastardizing an acceptable method. You'll probably get a better suggestion than mine by the end of today.

Not a bad idea but also not easy to do. Thanks.