ZZGAMAZZ
Elite Member
- Joined
- Jul 23, 2007
- Professional Status
- Certified Residential Appraiser
- State
- California
I just experienced an epiphany that if I am correct everybody else probably realized it years ago, however regarding a 1 - 4 unit residential income appraisal although I'm not sure if something about the 3.6 multi-unit format got me thinking about this:
An Opinion of Value is based upon the SCA.
An Opinion of Value that is based on the Income Approach can't be obtained from the MLS rental section because units are rented individually rather than as the entire multi-unit property.
Actual rents must/should be used rather than pro forma rents.
Whether the rental income comps can or should be identical to the SCA comps is often debated on the AF.
So.... why not REQUIRE the properties reported in the SCA to be identical to those reported in the IA, which would essentially eliminate the need to report rental comps separately, with the GRM developed in the SCA with the addition of a relatively straightforward, embedded calculation to determine the GRM, even relying on pro forma rents in the absence of actual rents--that if they are accurate would seem to be a better basis of GRM that actual, established rents, or adding a filter that would adjust pro forma rents to actual rents, or vice-versa.
Peers? Yes or No or doesn't matter because it is what it is.
Thanks.
An Opinion of Value is based upon the SCA.
An Opinion of Value that is based on the Income Approach can't be obtained from the MLS rental section because units are rented individually rather than as the entire multi-unit property.
Actual rents must/should be used rather than pro forma rents.
Whether the rental income comps can or should be identical to the SCA comps is often debated on the AF.
So.... why not REQUIRE the properties reported in the SCA to be identical to those reported in the IA, which would essentially eliminate the need to report rental comps separately, with the GRM developed in the SCA with the addition of a relatively straightforward, embedded calculation to determine the GRM, even relying on pro forma rents in the absence of actual rents--that if they are accurate would seem to be a better basis of GRM that actual, established rents, or adding a filter that would adjust pro forma rents to actual rents, or vice-versa.
Peers? Yes or No or doesn't matter because it is what it is.
Thanks.