Can a certified residential appraiser appraise a commercial condo unit under $250k?

[djd09]

With some experience, I think it is easier to appraise a small commercial condo unit than a single unit residential property.

currently, i find most residential properties complex...the cookie cutters are long gone...do you base the value more towards sales or income?

 

[BRCJR]

currently, i find most residential properties complex...the cookie cutters are long gone...do you base the value more towards sales or income?

It depends.

You want to look at the market and determine if most are tenant or owner occupied.

If owner occupied, I lean more toward sales, fee simple. If tenant occupied, it may depend on length of remaining lease and the terms of it, too, I lean toward leased fee.

What are the comps telling you? When sold were they sold as owner occupied and the next owner plans to occupy? Were they sold as tenant occupied and does the next owner plan to continue to lease the property?

Again, it depends.

 

[Fernando]

Commercial units are only valuable as much rent as they can get from market.
Thus, appraiser also need to analyze the tenant quality in paying rent on time and whether rents are at, below, or at market.
Walgreens use to be triple A of commercials, but many have closed stores. I have one that closed across my property and has a sublease sign for over a year. Better closed than deal with losses from shoplifters.
Commercial units have more issues to deal with than Residential units unless it's in rent control areas.

 

[George Hatch]

All RE is local. We have lots of non-residential condos in the region

Industrial condos

 

[George Hatch]

Medical/Dental Office condos


Professional ofc condos

 

[George Hatch]

mixed use with residential over retail, live-work and commercial loft units are another variation

 

[Fernando]

Commercial tenants are different from Residential tenants or owners.
Most are not owner occupied and I'm having more problems with more commercial tenants with their finances in paying rent.
Commercial units have more risk than residential.

 

[glenn walker]

i knew an appraiser that appraised a single family house in a commercially zoned area...the state took his license...well technically they didn't take it but impose such high sanctions that he had no choice but to forfeit it or whatever

With some experience, I think it is easier to appraise a small commercial condo unit than a single unit residential property.

currently, i find most residential properties complex...the cookie cutters are long gone...do you base the value more towards sales or income?

Office Condos are not 80

Commercial tenants are different from Residential tenants or owners.
Most are not owner occupied and I'm having more problems with more commercial tenants with their finances in paying rent.
Commercial units have more risk than residential.

Your 80 year old commercial building is not a office condo-also Office commercial condos are almost always used by the owners and single tenant structures. Based on your past post you are not a good property manager and your building is a in total disrepair . Fire " Calculated Realty Solutions" sell the building and get out of real estate.

 

[George Hatch]

In our region most of the individually owned units are owner-occupied. Obviously when there's a block of them then those get rented out. I'm doing a 12-unit assemblage that's being operated as a single economic unit; it's half of a 4 building project. The pic in #54 is of that project.

Another thing that sometimes happens is 2 units will be combined and occupied as a single unit. The office pic in #55 above has such a unit that I appraised last year (owner was a lawyer and used it as their law-office).

One reason that a single unit that's owned will usually start out being owner-occupied is because the combination of expenses + association dues is higher than the pro-rata share of expenses for a conventional multi-tenant building. Meaning, its not as profitable to rent them unless there's a bunch of them being operated together. If a buyer wants to buy a cash flow its more profitable to just buy a conventional multi-tenant property and operate it as such.

That's the same reason that most small office, retail and industrials will be purchased by owner-users, not rental income investors. The pricing on them is virtually always higher than their rents will support. When they're tenant occupied that is usually the result of the owner moving their business or retiring but keeping the property. Which that's a somewhat different strategy from actually buying the unit for its rents.