Residential property with commercial use

[Jennifer Maki]

Hi, I just finished inspecting a single family home in a 100% residential neighborhood. Turns out that this property is being used as a care facility. There were no apparent structural changes made to the property to accommodate this use. In fact, aside for a couple of hospital beds in two of the rooms and the nurse that answered the door, there wouldn't have been any reason to think the property was not used solely as a residence.
I am a certified appraiser and since I cannot do commercial, I’m wondering if I can complete the appraisal? I would appraise it as a single family home and not as a business, but is this acceptable?
Any advice would be appreciated.

 

[Smokey Bear]

You're appraising the house, not the business. There's a similar thread going on right now at http://appraisersforum.com/general-appraisal-discussion/111663-what-do-you-think.html. If the zoning is residential, the use is residential, then appraise it as residential. Most states have zoning exemptions for small home care properties - group homes, foster care, some halfway houses, in home daycare etc. Requirements are different, in CA if it's 6 beds or less, it's acceptable without getting a variance. You might want to call your zoning department to double check.

 

[jimstein]

Jennifer is right...

Unless it's both a legal use and subject to a leased long-term, in which case you would be appraising the leased fee interest in the property most likely using a GRM or EGIM analysis.

But even still that shouldn't preclude you from appraising the property.

Good luck!

Jim

www.jamessteinvaluation.com

 

[Jennifer Maki]

Thanks so much! I really appreciate the advice