Market rents for comparable sales - GRM, FHA 1025?

[ZZGAMAZZ]

By definition, the GRM is the mathematic relationship between the sales price and the rent of a property that was rented at the time it sold. If there are no current sales that let you do that, then you analyze older or distant sales to extract the GRM. Ideally, those are the same sales you used as comparables in Sales Comparison Analysis. Sometimes that isn't possible. When it's not, you use other methods and you explain, explain, explain.

Quick Question: How is the original question addressed in the scenario that you describe? Are you opinion that GRM based on partial occupancy is equally as accurate as fully-leased units--or even more pertinent if the baseline market standard is comprised primarily of partially-leased multi-units???

 

[sputnam]

You can assume that the owner's side would rent for the same amount as the rental units. I would only do that if there were no sales of fully rented properties. If you have to estimate the rent for one of the units, make sure that the appraisal report is clear that is what you did.

 

[ZZGAMAZZ]

You can assume that the owner's side would rent for the same amount as the rental units. I would only do that if there were no sales of fully rented properties. If you have to estimate the rent for one of the units, make sure that the appraisal report is clear that is what you did.

Prob no pat answer but I wonder whether the validity of a less similar but fully leased multi comp is superior to a model match, but partially leased comp?

 

[sputnam]

Prob no pat answer but I wonder whether the validity of a less similar but fully leased multi comp is superior to a model match, but partially leased comp?

Dunno. It's a market question. If someone wanted (or needed) to know badly enough then, they could do the research and analysis.

 

[ZZGAMAZZ]

You can assume that the owner's side would rent for the same amount as the rental units. I would only do that if there were no sales of fully rented properties. If you have to estimate the rent for one of the units, make sure that the appraisal report is clear that is what you did.

 

[ZZGAMAZZ]

Yes of course. Reminds me about an issue previously discussed that's impt IMO but that wasnt discussed much: is it appropriate/acceptable/ideal when completing a 1025 form to use SCA comps in the IA as well?

 

[sputnam]

Yes of course. Reminds me about an issue previously discussed that's impt IMO but that wasnt discussed much: is it appropriate/acceptable/ideal when completing a 1025 form to use SCA comps in the IA as well?

Of course it is. Why wouldn't it be acceptable to use the same properties for data in both the Direct Sales Comparison and Gross Rent Multiplier method?