Rental home doesn't need 1007

[Fernando]

I agree you have to describe why you are not developing the income approach to value and be careful that your commentary is accurate and understood by the reader of the report. That said even if people are purchasing an SFR for income potential I simply don't see the income approach as credible in my local market. It may be credible in different markets. Where I live the sales are still based on what other properties are selling for even if they are doing an analysis to see if it is a beneficial rental property.

So just a friendly discussion. Why would I ever develop the income approach if it doesn't produce credible results? I am not saying you suggested to do so, just wondering.

I have canned comments for not using income approach. Just like I have canned comments for highest and best use. And canned comments for Covid.
Once you have good comments and they're applicable, no need to wonder.

 

[JasoninAK]

I have canned comments for not using income approach. Just like I have canned comments for highest and best use. And canned comments for Covid.
Once you have good comments and they're applicable, no need to wonder.

I am sure you do. I have a lot of saved canned comments that really can speed up an appraisal. I certainly wasn't implying you didn't. My post was just stating I just don't find a lot of relevance in the income approach in single-family homes. That is in my market though. There is almost no good data to do adequate analysis. If everyone is paying 120XGRM that is one thing but I never see something that simple. I just don't find it of any value unless I develop a true cap rate and have good information on expenses for each property. Perhaps if I saw people doing a good analysis then I could change my mind. When I see people due an income approach in a single family appraisal they seem to throw in a GRM and provide little analysis.

 

[Fernando]

I would love to buy SFR if cash flow works but it never in my area. Maybe Oklahoma.