Appraising Dog Kennels

[Pittsburgh Pete]

A stupid question from a Residential guy, but when doing the Cost Approach wouldn't there be a substantial Functional Obsolescnce factor for the configuration as a kennel?

If it is constructed for use as a kennel, what would be the functional inadequacy? Admittedly it would not be conducive to conversion to an alternate use but if its highest and best use is for a kennel, there wouldn't be any signficant functional obsolescence.

In today's market, however, I would be concerned with external obsolescence. But then given people's love for their dogs, such a facility may not have felt the downturn.

No such thing as a stupid question Rex (only stupid people asking them--only kidding of course--you know of my deep and abiding respect for you!)

 

[Restrain]

The value as an Operating Business is directly tied to the business accumen of the operator. You screw up one animal in your care, and the word gets around very quickly, business becomes history and you're stuck with a bunch of concrete and fencing.

Talk with the client and discuss the fact that you would have to be valuing the business, and the variables that can go into that, and see if that's really what your client wants. These things have no real rental value, as most of us old-timers have run across semi-rural properties that "used to be kennels" and are simply abandoned runs and empty buildings that have minimal value.

 

[CANative]

If it is constructed for use as a kennel, what would be the functional inadequacy? Admittedly it would not be conducive to conversion to an alternate use but if its highest and best use is for a kennel, there wouldn't be any signficant functional obsolescence.

In today's market, however, I would be concerned with external obsolescence. But then given people's love for their dogs, such a facility may not have felt the downturn.

No such thing as a stupid question Rex (only stupid people asking them--only kidding of course--you know of my deep and abiding respect for you!)

How do you get a HBU as specific as a dog kennel? A location conducive to use as a dog kennel would likely have a laundry list of permitted uses. A dog kennel is one among many.

Property rights and improvements. In this case, specialized improvements which require a specialist to use them. I'd probably say "land value."

 

[Mr Rex]

If it is constructed for use as a kennel, what would be the functional inadequacy? Admittedly it would not be conducive to conversion to an alternate use but if its highest and best use is for a kennel, there wouldn't be any signficant functional obsolescence.

In today's market, however, I would be concerned with external obsolescence. But then given people's love for their dogs, such a facility may not have felt the downturn.

No such thing as a stupid question Rex (only stupid people asking them--only kidding of course--you know of my deep and abiding respect for you!)

If the buildings are constructed as Dog Kennels, then I suspect that to go a long ways towards making the H&BU of the buildings as Dog Kennels. I guess one would have to do an absorption analysis in the local market to support the need for a certain number of kennel pens and runs to establish the H&BU of the Real Estate as a kennel. I'd like to see that for my own amusement.

FWIW, there is a large local kennel on the farm behind me, about 1/2-3/4 mile as the crow flies. My dogs ears perk up when I run them on the back side of the farm as their brethern call out from behind the prison walls.

 

[ARRE]

I think you must determine the correct definition of value is for your client. If you are doing market value, and you are performing an income analysis, you must account for all those items which are "attributable" to the business. I suggest you look at the flow chart of going concern in The Appraisal of Real Estate...it provides a very good flow chart. We do the same thing when we are looking at a motel or assisted living facility...no flag, but you try to account for all the other items attributed to the business (if you decide the income approach is applicable to a credible opinion of your value definition).

I grew up on a farm with a dog kennel (20 in/out runs), a dog grooming shop, etc...It is much like a carwash...essentially a concrete structure with specialized equipment for the business use. Most are purchased on the going concern of the previous income stream.