Appraise as SFR or MF?

[Sadie]

If, as the OP states, that the value as a rooming house is "way more" than that of an O-O SFR, why is it unreasonable to consider that the HBU, hence a lot of buyers, are looking at it and others in the area as income properties? With the shortage of living space in many areas of the country, these may be more popular and the way of the future for some economic cohorts.

If the owner is the one obtaining the mortgage, it is not a leased fee situation, just like any other landlord tenant scenario. The difference is the renting out the rooms individually, with their own lock etc. Typically a rental is one amount for a whole dwelling unit with however many roommates is necessary. Some jurisdictions do not allow more than a certain number of unrelated people to occupy one dwelling.

 

[J Grant]

If whomever occupies a property at time of inspection determines what a property is, then should a vacant property be called a storage unit? ( sarcasm)

 

[Zoe]

The thing about a 6 month signed lease with good tenants, is like the income approach won't help much when all they are renting is a bedroom and shared living, kitchen, and bath. If the lender gets it back, they will boot the tenants by the time they get possession of the subject.

Especially if loan is in house. The lender just wants to know the subject is making a profit. They would definitely want you using SFR on sales comps.


If income tax return showed a loss to IRS, it would be a problem for the client.

 

[Tom4value]

I didn’t read all responses so I apologize if this was already addressed.

It is a single family home. A multifamily property has multiple dwelling units; units with their own entrance, kitchen, bath, bedrooms and living areas. They cannot be accessed by the others. You have separate tenants with locks on the bedrooms but they all share the kitchen, bath(s) and living quarters.

Assuming that that is all legal, appraise it as a single family property and develop the income approach as it is applicable.