Rental Survey (FHA)

[Daniel Fenesan]

I received an order to do a rental survey for a property that will be an FHA transaction. Do I need to go out inspect the property? And is there anything different that we need to do for an FHA transaction?

Thanks for your help in advance.

 

[RSW]

What is a rental survey? Are they wanting a comparable rent schedule?

 

[Daniel Fenesan]

Yes...Sorry, people call them different things...I guess around here thats what they call it....

 

[RSW]

In that case, Yes. You should go and inspect the interior and exterior of the subject property as to know what type of rental comps you are going to choose. You will need to know if there are any items of deferred maintenance or functional obsloescence. Just like doing an inspection. You may not need to measure, but I would take photos and log in the quality and condition of the dwelling. You will be doing an appraisal if you are giving an opinion of market rent for the subject property.

 

[Jerry Bone Jr]

Rental Survey or Rent Schedule, either way coming from an Appraiser, it is an appraisal. Instead of Market Value, your assignment is to form an opinion of Rental Value. Be sure to follow USPAP, including Standard 1 & Standard 2.

 

[timd354]

There is nothing in USPAP or any supplemental standards that I am aware of that would require you to actually physically inspect a property that you are doing a rent schedule on. Even though expressing an opinion of market rent is, without question, an appriaisal, USPAP does not require that a physical inspection be done in order to appraise a property. Now, if credible sources of information are not available that would allow you to do a credible rent schedule without makng a physical inspection, or if the agreed upon SOW requires a physical inspection, then, by all means, a physical inspection is required. In any case you should get the client to agree to an appropriate SOW and you should fully disclose what you did and did not do in order to develop your opinion of the market rent and also disclose any EA's used in the report. Additionally, do not forget to include the required certifications and definitions of market rent in your report.

 

[RSW]

Tim has given you some very good advice.