HABU SFR rental

[mp2277]

HABU is single family residential. Lake front, established community, 20-30 yo homes. No problem. However they want rental analysis. Everything that is rented is weekly vacation rentals, there is no, and I mean no long term leases in the area. Is it proper to say the rental HABU is weekly vacation rentals or should I explain it differently? Thanks

 

[TerryRohrer]

You don't have a highest and best use per approach. Do rentals dominate the market, or single family owner occupied? Are recent sales predominantly acquired to rent, or are rentals offered to defray costs of owning?

 

[Joe Flacco]

No long term rentals going back how far?

 

[Joe Flacco]

You use whatever information you do have.

 

[Terrel L. Shields]

I understand the problem having finished a lake front property that is a VRBO and most of the rentals are STR. I would tell them it does not exist and STR are not 'market based' since they include personal property and a business enterprise value. Then I would step away from the lake and use comparable rentals from off the lake and if they don't like it tell them to go find some rentals that are not STR.

PS - my subject was for sale because the net income was not nearly as high as the owners anticipated when they started in 2018

 

[mp2277]

No long term rentals going back how far?

None, zero. This is the only county on the lake that allows short term rentals. People can make more in a week than a month long term

 

[mp2277]

I understand the problem having finished a lake front property that is a VRBO and most of the rentals are STR. I would tell them it does not exist and STR are not 'market based' since they include personal property and a business enterprise value. Then I would step away from the lake and use comparable rentals from off the lake and if they don't like it tell them to go find some rentals that are not STR.

PS - my subject was for sale because the net income was not nearly as high as the owners anticipated when they started in 2018

Thanks

 

[J Grant]

HABU is single family residential. Lake front, established community, 20-30 yo homes. No problem. However they want rental analysis. Everything that is rented is weekly vacation rentals, there is no, and I mean no long term leases in the area. Is it proper to say the rental HABU is weekly vacation rentals or should I explain it differently? Thanks

HBU is SFR with some owners renting out short term, and the value of short-term rental income is baked into the sale prices.

Then, state that since the subject is SFR, and using STR would put it into hotel-type use, using monthly or annual leases from other areas and adjusting for lakefront.

 

[Tom D]

We got the jersey shore with tremendous summer rentals. Rest of the year to cold for ocean, being outside and mostly everything closed till summer.
Isn't a single family still a single family reguardless of rental statues. The permitted use is a functional use, or maybe a seasonal use. If all the homes are like that, then what difference does it make.
Are you appraising a sf home, or a business. Although, the retal income derived makes them more valuable to own, or the owner cannot afford the mortgage alone, just to be there part time.

 

[sputnam]

HABU is single family residential. Lake front, established community, 20-30 yo homes. No problem. However they want rental analysis. Everything that is rented is weekly vacation rentals, there is no, and I mean no long term leases in the area. Is it proper to say the rental HABU is weekly vacation rentals or should I explain it differently? Thanks

The fact that 'they' want a rental analysis does not prove that the HABU is weekly vacation rentals. Do the work. Analyze the subject in the contexts of the four steps and then draw your conclusion. 'Weekly vacation rental' would only be the HABU if that use produced the highest value. To know that, you have to analyze the market data. Do dwellings that are used as vactation rentals sell for more, less, or the same as those who are used as second homes or primary residences?