Duplex Rental Comps

[Lee Steidel]

I am a licensed trainee doing a 1025 for the first time. Neither public records nor local MLS give square footage breakdown by unit. My superisor told me to "estimate" unit SF breakdown.

What basic SF adjustments are deemed reasonable to use--e.g., 150 square feet +/- for additional bedrooms? Subject property is located in Newport Beach, CA where rents are over $2/Sq. Ft., so accurately estimating rent comparable square footages appears to be much more critical. Thanks for your help!

 

[bradellis]

Lee,

I'm a bit surprised your supervisor gives you a Newport Beach property to do as your first 1025. These can be complicated due to the very high selling prices in the area.

Do make sure he/she looks it over carefully.

Yes, you may estimate the sizes of the rental comp units- in fact, you may actually have to do this if the information is not available. Make sure you disclose that you did so. There some data sources that will give you the actuals- Win2Data, Dataquick and others- sometimes. Look up the parcel and see if there are 3 records. The first is typically a combined record and the other two are for the units- BUT these are more often shown for "two on a lot" properties. If yours is a single building, it may not show.

Do not forget to factor in the amenities. One may have an ocean view whil another may not, for example.

Good luck.

Brad Ellis, IFA, RAA

 

[Restrain]

If its a rental, isn't the unit size shown on Rental listings? At least they are here. So, I would see if a unit has popped up as a rental in the last few years. You may find all the data you need there.

Good luck.
Roger

 

[Frederick R. Ruffell]

Lee,
Yes estimating the unit breakdown is acceptable, I do it all the time when the info is not avail, but check ALL (active, pending, sold, withdrawn, expired, and cancelled) MLS listing status for the subject info. Also you can use active, pending, sold, withdrawn, expired, and cancelled MLS listings for rental comps data if it is given and you feel it is credible.
Don't just use a SF adjustment between rental and sale comps because I have found in my market that bedroom count matters more to the investor as they can get higher rents for a 3 bedroom than a 2 bedroom of similar size. AND get your supervisor to "hold your hand " on this one and the next 5.
Most residential real estate appraisers I know HATE 2-4 units, I love them and specialize in them, Why?? because once you have learned how to do them they take only a couple of hours more to complete and the fees are at least double. Plus, in my market, the comps are somewhat fewer ( but still plentiful enough for good data) than SFR and once you have been working an area for 6 months you have all the comps in in your database and can import them quickly into your reports.

 

[John Hassler]

Lee

WhenI first started there were no published sizes for homes or units and we guesstimated everything. And you know what, banks made loans back then too.

When I have to estimate the size, I base it on standard 20' garage widths. If you look at a home and and say to your self that "looks about 3.5 garage widths wide and 2 garage widths deep" the home is roughly 70' x 40' (less the garage if there is one). For units it can be easier as you can often walk on the propertywithout anyone caring (do at your own risk though!). I have a nearly a 3' gait and I can just pace off the width and depth.

150 sq ft is probably the minimum size of a bedroom when you consider the bedroom itself, a closet, and some hallway to get to it. 200' - 250' is more typical in my area.

Whatever you do just be sure to note in the report that it is YOUR estimate based on whatever means you used. You can't pull rabbbits out of your hat (or anywhere else)!

John Hassler