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Establishing Grm For Short Term Rentals

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Lilmscity

Freshman Member
Joined
Feb 19, 2017
Professional Status
Certified Residential Appraiser
State
Florida
I was recently engaged to complete a 1007 on an oceanfront condo which allows 1 week rentals. I was able to locate some comparable properties with similar minimum rental terms, leased out annually. In the "Worlds Most Famous Beach" market, the highest and best use is definitely weekly rentals which would yield the most income. The following was noted on the association website: RENTAL RATES
Rental rates are based on length of stay, time of year,
and special events (i.e. Daytona 500 Races). Rate ranges:
  • weekly: $735 - $2500
  • monthly: $1400 - $5000
  • nightly: $115 - $325 (4-night min.)
plus cleaning fee and state and local taxes. How would I go about establishing an accurate GRM and vacancy ratio for this type of rental term? There is no verifiable info is available online.
 

BRCJR

Elite Member
Gold Supporting Member
Joined
Sep 20, 2005
Professional Status
Licensed Appraiser
State
Virginia
Ask for three year rental/expense history and do a "full blown" income approach.
 

Jim Bartley

Senior Member
Joined
Jan 20, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
You are going to need sales of these rental units or at least a "clone" to compute a GRM.
 

JTip

Elite Member
Joined
Oct 12, 2004
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Are you allow to appraise short term rental properties, those that incur sales and local taxes, as a Certified Residential in Florida?
 

J Grant

Elite Member
Joined
Dec 9, 2003
Professional Status
Certified Residential Appraiser
State
Florida
It might be a condo hotel
 
Last edited:

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
I was recently engaged to complete a 1007 on an oceanfront condo which allows 1 week rentals.
Definitely look up the condo docs - most likely you can find them online via your County Property Appraiser website.
JGrant makes a valid point:
It might be a condo hotel
Checking the docs should give you a better idea
 

bnmappraisal

Elite Member
Gold Supporting Member
Joined
Nov 9, 2011
Professional Status
Certified Residential Appraiser
State
Florida
oceanfront condo which allows 1 week rentals
Side note ... is the 1 week rental the minimum? Then I wouldn't be looking at properties that allow "nightly" rentals

I'm also still trying to figure out the SOW for your 1007. What type of client is this? AMC/Lender or Private Party?
 
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