Gross Rent Vs Gross Income

[Terrel L. Shields]

Can you imagine some one going before the state board for using a GRM of 84 and the board says they should have used a GIM of 7?

Unfortunately, yes I can imagine because I have seen it with my own eyes. I also saw an investigator argue over the nomenclature of a chicken house [hens laid eggs, breeder hens lay eggs that become hens...what i call grandparent stock]. I was roundly reamed with very sharp teeth once by a lesbian appraiser [i mention that only for the stereotypical effect that she was a b**ches B**ch.] for calling a chicken house a chicken house instead of a POULTRY BARN.

The meaninglessness of it all is astounding, yet our "peers", our "overseers", the Regulators (wasn't that a vigilante group in Montana?) if you will, form their opinions of the overall quality of our education, our reporting, and our ability often hinged upon a very few such quips from our work. It's about first impressions.

Austin also said

how do you determine the value of these buildings when you put them on the market.

There be the crux of the problemo. We use mathematical methodologies that are entirely foreign to the people who sell and set the prices for these properties. It is only by the accident of attrition and perhaps even influenced by the appraiser, that these properties sell within a defined range.

Example? A franchisee with 10 KFCs in our area went belly up. The franchises were resold at set prices of between $365,000 and $400,000±. Small town, big town, good location, poor location. One sold and was demolished to make way for a completely new KFC under different franchisee. One was remodeled ditto. A third sold to a pawn shop owner who could have bought any number of properties for lesser money, or built for a fraction what he ended up investing. Why? Because he could, I suppose. I don't know. I only know i appraised it for less than 2/3rd what he paid. I think it has something to do with the fact that pawn shops are pretty much a license to steal in my state and he anticipated a very high income...and probably will pay for the building far easier than with a fast food franchise.

 

[EDWARD BERRY]

The GRM and GIM terms at first were really confusing in the textbooks.

Not what they were, that was easy.

After about 6 months it finally dawned on me(you have to remember in Arkansas at that time there were only 4 appraisers in NW ARK) that the GRM is mostly used in REsidential Appraisals.(income approach)

The GIM is used more in commercial appraisals(income approach).

I think the GRM is used in the MARKET approach for commercial.

but i may be just full of pie.ed

 

[Terrel L. Shields]

you have to remember in Arkansas at that time there were only 4 appraisers in NW ARK

ED-
Yeah, and I remember when it was a two lane highway of several miles between Fayetteville and Springdale, ditto Springdale and Rogers, Rogers and Bentonville....now they are all blended together. My dad was offered 200 ac. between Bentonville & Rogers in the 60's for $400-500/acre by the late Lawrence Harris, banker. Dad couldn't think of a way the place would pay for itself, but Lawrence insisted that it would make a fortune if he could hang onto it 20 years. It would bring $25,000 - 30,000/ac. now. Ditto for Dal Moser's place, an old foxhunter from the yesteryear. We hunted fox over what is now Pinnacle golf course & estates in the 50's, early 60's. As late as 1983, I lost the nuts off a trailer wheel cutting thru Wallis Road from New Hope Road, just about where the entry to Pinnacle is now, and not a soul came by. I ended up walking back down the road and found all but one nut within 300 yd or so. Put the wheel back on, tightened the lugs and went on home. Never met a car until Cave Springs. I didn't have a tag or a light one.