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3 Family With Partially Finished Basement - No Comps

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Valueseeker

Junior Member
Joined
May 19, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Hello,

Was seeking the advice of you guys on this. I have a three family with a common basement. It has a nicely partially finished area that has a half-bath as well in the basement. This space is a common area for all units to access.

In this city, only 12 3-family homes sold in the past year. None with a partially finished basement.

How would you guys give it value?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Hello,

Was seeking the advice of you guys on this. I have a three family with a common basement. It has a nicely partially finished area that has a half-bath as well in the basement. This space is a common area for all units to access.
In this city, only 12 3-family homes sold in the past year. None with a partially finished basement.
How would you guys give it value?

Are the tenants paying any higher rents in your subject for the shared basement? If so, then your income approach can show subject unit rents are higher than market rents for units without basement, and make your adjustment based on that. If rents are not any higher, then who cares...an investment property buyer is not going to pay more for a property if it gets no more income than another property. still, it;'s a nice feature to have...unless you have evidence to do so, I'd make no adjustment but factor it as a qualitative factor in the reconciliation.

An expanded search 2 years plus back will show if other comps have finished basement, if not, it might be a super adequacy for a multi family property with marginal impact on value. At some point, make a decision based on best market evidence you gather, and explain why you did what you did ( adjust or not adjust)
 

Valueseeker

Junior Member
Joined
May 19, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
Thanks again. 1 unit vacant. One is owner occupied and the other is a friend of the family paying under market rent. I don't have the data to say if its worthy of an adjustment. I was considering not adjusting and explain but with this AMC I wanted to be proactive and have one with a fin basement. I'm thinking super adequacy. Thanks guys :)
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Doesn't sound like the property is performing with stellar results in the rental market, does it. A friend paying low rent, a vacant unit ... why isn't the vacant unit rented if a shared basement is such a tenant draw ? (sarcasm). That's your answer right there, though of course make a wider/older search to see if there are multi family comps with a finished basement.
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
Another way to also analyze these properties is, do any of the comps offer equivalent, if not the exact same amenities..some multi family units are very basic. The units and a parking lot . But others offer some amenities..one has a private rear yard for the tenants, another patios, another a basement. So the amenities are not the same but equivalent perhaps in offering something "more" to tenants...whether or not the tenants pay more is another story, but you can use the amenities in sales comparison approach.
 

Valueseeker

Junior Member
Joined
May 19, 2016
Professional Status
Certified Residential Appraiser
State
Massachusetts
interesting. Would that look like another line item on the grid?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
If I differentiate the items out, yes they are another line item on grid...I might label it "other", and on one comp it;s patio, anther the basement, another comp the yard .
 

Webbed Feet

Elite Member
Joined
Feb 11, 2005
Professional Status
Certified Residential Appraiser
State
Canada
Hello,

<...snip....>
How would you guys give it value?

If training you I would try, as best I could, to get you to first ask the right questions. For in always asking wrong questions one is destined to always arrive at wrong answers.
 
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