Barns, stables and other odd buildings

[Restrain]

There is a section of my area that is to quarterhorses what Lexington, Kentucky is to thoroughbreds. Stables, etc are not an extra, they are required. I have looked at paired sales of where there was land and a combination of land and buildings. Value of the buildings was essentially 100% of value - no loss other than normal depreciation. In another area, a home owner had to add a 30x40 shop in order to make his home marketable. He couldn't get an offer because everyone wanted a large shop.

Therefore, I humbly submit that value of such buildings is directly dependent on the location and needs of the market.

Roger

 

[Frank Bertrand]

Value is sooooo much perception and not reality. Look at what they charge for water in the stores.

 

[Blue1]

Well I raise horses and have barns and outbuildings. :lol: I also appraise similar properties from time to time. I am not a :silly: horse person....I'm just crazy to own horses that's all!!! :lol: The "horse" properties I appraise are essentially single family residences with "horse facilities" they are not businesses they are "hobby farms." As we all know hobbies cost money and seldom return any appreciable income. (Breaking even on horses is rare!) Anyway......If you can't find similar properties for comparables, then that barn is worth little more than ZILCH as an amenity on an appraisal report! O.K. MAYBE up to 5 grand. (Even less if the Greenhorn put it too close to the house!) Sorry it cost 50 grand to build but......I'd tell em...."you built it for your own use and enjoyment....it ain't an investment" 'Course if you're appraising a big time horse breeding/training business/facility you're talkin' a completely different assignment.......Just my opinion...... 8)

 

[Terrel L. Shields]

Mike - I kinda ride Wide instead of tall in the saddle myself, but if I have a horse big enough to carry me, he's too tall for me to get on.

In general, I might agree with the above folks, but here is my spin.

9 of 10 cases I get is a farm of 40 - 200 acres that only wants to take 10 acres and the house and outbuildings. Yes, almost any stable has a functional problem - lack of horsey people to buy them, except in real horse country. As a ten acre tract, I feel like the value is even less, as a 20 horse stable needs more than 10 acres unless you drylot the whole bunch.

Boeckh Cost guides are pretty good to calculate RCN. That is a starting point, not just for the property but for the comps. Even if you have to go back 5 years or more, find some horsey comps. Then using the correct multiplier for the date of sale, start abstracting. 2 assumptions. Land appraised as if vacant. House appraised as if no horsey barns are there..i.e.-is not impacted by the barns. If I have a sales price of $600,000, Land worth 100,000, house worth 350,000, then the barns contribute 150,000. I then attempt to allocate to those barns based upon the effective age, total life, and RCN. If you have as many as 3 or 4 such sales, a pattern emerges...The more buildings the lower per SF contribution allocated to non-wear and tear. i.e. - if there is a 30 x 40 building on the site, it exhibits very little functional obsolescence. If there are 2 hay barns and a 40 x 100 stable, then there is a lot...and if there is (like the last one we done) 20,000 SF indoor arena (18' wall, dirt floor, red iron construction); A 40 x 100 stable, (2) steel truss hay barns, AND a manf. home,, expect the Functional obsol. to be 2/3rd or more. Of the $250,000 the owner spent, we allocated less than 1/2 to these barns AND those sales I mention do suggest a marketing time of 1 year or more. There are simply going to be a dearth of buyers in addition to a high discount.
Ter

 

[EDWARD BERRY]

In our horsey market, after the first typical outbuilding, the rest do not command much money.

IF, you can find sales with extra buildings, sometimes you can start extracting the components-land, SF house, and then the balance is the value of out buildings.

Rarely does that figure equal 50% of the cost of them. Usually about 15%.

The sum of the parts cannot equal more that the whole.

Good Luck-ed in Arkansas.

 

[Richard Carlsen]

We are starting to see a few more horse setups (Why anyone would want to keep a horse is beyond me) and on small to medium acreage parcels. Many are just converted pole buildings that could also have normal storage utility. I tend to view these as comparable to regular pole buildings in my adjustments. Some special cases, including one guy who had $95k into a beautiful six stall barn and tack room, get a contributory adjustment of up to 65% if there are other amenities of the property which would have likely attracted a serious horse-type buyer. In these cases however, marketing time usually has to be adjusted up. On other less expensive but specially built barns etc., 50% of cost is generally the max that I can justify in my market where horse keeping is still not a big deal.

 

[Jeff Horton]

Thanks for all the input. I ended up telling these people to find another appraiser. Talked the broker and there was something going on here that they were not telling me. Broker was a commercial bridge loan maker, not a mortgage company. They were suspicious too. Decided that something was fishy and with the husbands attitude it was better to walk off from this one.

Never did find any market data but I am leaning toward 25% of the cost of the barn in our market. Even though I couldn't support any additional value if I was pushed on the matter.