Residential Bed & Breakfast

[HunterBoehmer]

I have recently been asked to perform an appraisal on a Bed and Breakfast property. The property is zoned residential and the bed and breakfast is legal. The appraisal is not for lending purposes. Does anyone see an issue with a certified residential appraiser performing this assignment?

 

[ctapraser]

There could be that pesky part of USPAP called competency. FWIW, you want to mention the lack of....before you accept.

 

[HunterBoehmer]

Thanks for the response. The disclosure of competency has been made. The home just features suite rooms, which we have plenty of homes in the area that are similar. Obviously, an income approach will also be taken into consideration.

 

[Terrel L. Shields]

Call your state board and see if they qualify it as residential. I believe that at least one state will sanction residential appraisers for these as they treat them as commercial...sort of a mini-motel. And even then it might matter if it is above or below the deminimus of $250,000

 

[Papoua Jose]

A B&B is a special purpose property. It might look like a duck but doesn't quack like one.

 

[Howard Klahr]

A bed and Breakfast is a commercial property. However, depending on your state statutes and regulations, residential appraisers in certain states may appraise commercial properties up to a certain transaction amount in some states there is no such limitation for non-federally related transactions. Other states limit residential appraisers just to residential properties federal transaction or not.

Having said that, there are many differences between an appraisal of a residence and that of a b&b. If you are allowed to proceed, do so l=knowing there is a quite a bit to learn about.

 

[CANative]

Sometimes a B&B is just a single family residence whose owner likes to pretend he's a hotelier.

 

[Howard Klahr]

If it is licensed as a b&B then it is commercial, no sometimes about it.

 

[CANative]

You mean an administrative permit to operate a business on the property? What happens if the guy gets tired of making beds and breakfast and lets the license lapse? Does it go back to whatever it was before?

 

[Howard Klahr]

Does it go back to whatever it was before?

If there is not a valid license then there is not a legal business/use of the property. It would then become an issue of highest and best use wouldn't it?