Rent Split Property

[TerryRohrer]

It does not matter who put the walls up. The owner either did it themselves or hired someone, and they are likely illegally using it as a rooming house - they made a 4-bedroom or whatever it was into a 7-bedroom and converted the garage. First, call the client and describe it and see if they want to proceed.

If they do, you do not need to find 7-bedroom rental comps. Find whatever comps you have that have the most similar number of bedrooms yet are still SFR.
Get the owner to state how much rent they collect total from leasing all the rooms out. No matter what they tell you, it is put down as contract rent ( subject rent.) the market rent comes from similar SFR rented properties. The market rent might be lower than your subject contract rent.

I hear Trump can't read, either. Must be that Florida by way of New York thing.

Was given the original lease which has only one signatory, and states the property is a 4 bedroom 2.1 bathroom dwelling.

I'm not sure if the owner created the extra bedrooms or if it was created by the tenant who signed the lease.

 

[J Grant]

I hear Trump can't read, either. Must be that Florida by way of New York thing.

Then explain your reasoning, oh great one, why who put the walls up matters to the apprasial.

Of course, if the appraiser wants to find out who put the walls up, go for it - but whether the owner put the walls up or the tenant put them up, what difference does it make to the appraisal?

You did not bother to explain your reasoning of why it matters who put the walls up. Thanks for inserting politics into an appraisal thread!

 

[Zoe]

I can do the job. My client may have to agree on my fee. It is not a question of if I can do it. It is can my client afford me.

Competency can be disclosed legally anytime in the appraisal process. Fee can be too.

The other problem is appraiser is responsible for SOW. If client can't give you what you need, you have to back out.

You have to set the competency rule and scope of work.

 

[KHS445]

If you are using income to appraise market value, you should be basing your valuation on the master lease. The signor of the master lease, not the property owner, is the one who is receiving any and all value based the rent being received on individual beds/rooms.

 

[J Grant]

Have a property that has a "Rent Split/Rental Share". Was given the original lease which has only one signatory, and states the property is a 4 bedroom 2.1 bathroom dwelling. During the inspection I saw that some of the living areas have been enclosed to make bedrooms, and the main bedroom has been split into 2 bedrooms, still only 2.1 bathrooms, the garage was converted prior to the current owner purchasing it, so they basically now have 7 bedrooms if you count the enclosed garage.

I'm not sure if the owner created the extra bedrooms or if it was created by the tenant who signed the lease. I have a call into the management company to find out any information I can. I need to complete a 1007 with the report. There are other single room rentals in the area but not a lot. How would you write this?

1. As it is with 7 bedrooms, which will never bracket because its only 2600 sf, and 7 bedrooms isnt common in this size, nor do I have lease amounts for each room?

2. Make a hypothetical condition and base it on the way the lease is written?

There is so much confusion in this post it is hard to respond.

Wrt calling a management company- did you call the owner? Is the owner aware that the tenant cut up living spaces by erecting partitions to make 7 "bedrooms?"
(Regardless, you need to call your client as well and report what is there imo before proceeding )

But, going on with how to analyze the problem, this is a SFR, and the lease is signed for a 4-bedroom/2.1-bath dwelling. If the signed lease to the tenant, for example, is $2000 a month, then $2000 a month is the subject rent. Disclose, of course, that the tenant cut it up into extra rooms and might be collecting $ from it. (Unless you believe the owner is collecting extra money from the added makeshift rooms- you need to ask the owner that)

If the owner is not collecting any rent beyond the signed lease as a four-bedroom, then the tenant might be gaming their landlord and collecting extra rent by renting it out by the room/added rooms. That would make it an illegal use by a tenant to generate income, similar to if a tenant grew marijuana plants inside or rented rooms by the night to escorts.

This has an added element because the tenant (or somebody) disfigured the property by chopping up living areas by erecting walls to create additional "bedrooms. Though these types of partitions can usually be taken down at relatively low cost.

 

[Andee]

I have notified the client, waiting for their response.

As for the area, no it is not a college area. While we have several large colleges/universities in Dallas County, this area is not within walking distance of any of them.

The signatory on the lease is an individual and not a company. Not sure who is collecting the rent from each individual tenant, which is why I have a call into the Management Company to see if I can figure out what's really going on.

 

[Zoe]

I have notified the client, waiting for their response.

As for the area, no it is not a college area. While we have several large colleges/universities in Dallas County, this area is not within walking distance of any of them.

The signatory on the lease is an individual and not a company. Not sure who is collecting the rent from each individual tenant, which is why I have a call into the Management Company to see if I can figure out what's really going on.

You need to call code Monday too and see if they have a problem. Next will be time to ask for rent roll and income/expense records from owner. Make your client get you the records from the owner. You want your client to have the same records you have. In essence, you have to be in control and set the SOW..

 

[Surf Cat]

Whatever happened to this Andee? Did the client have you proceed? How?