• Welcome to AppraisersForum.com, the premier online  community for the discussion of real estate appraisal. Register a free account to be able to post and unlock additional forums and features.

SFR Investment Property Forms

Status
Not open for further replies.

hal

Sophomore Member
Joined
Apr 4, 2002
Professional Status
Certified Residential Appraiser
State
Michigan
I have not done a 1002 for an investment property. Could some one tell me how I consider the results of the Operating Income Statement and Comparable Rent Schedule forms in the appraised value. I understand this is a SFR propety. I understand it is investment thus the income approach. I am have pulled SFR comparable sales and rental comparable sales based on my adjustments for both and my final adjusted sales values I want some feedback as to how I should consider each. That is the income approach vs the comparable sales approach. Usually the income approach should get the most weight, but this is a SFR. How should I evaluate based on a SFR being used as an investment property. should i give the income approach more weight although the home can just as easily be used as a residential property or should I give each 1/2 consideration?
 

Oregon Doug

Senior Member
Joined
Jan 15, 2002
Professional Status
General Public
State
Oregon
Maybe I don't understand your question but I'm really alarmed by what I think you are asking.

You do understand that there are THREE traditional appraisal methodologies - the Sales Comparison Analysis, the Cost Approach and the INCOME APPROACH (each with variations) - don't you?

Sounds as though you are appraising a rental SFR and need to include an Income Approach, it also sounds as though you don't understand how to do that. My advise is to locate a local appraiser (one knowledgable in the market) that has done similar work and ask that he guide you through this. You may have to give up part of your fee for the learning but that's got to be cheaper than a complaint.

Maybe less alarmed by the fact that you are asking...........Oregon Doug
 

Ted Martin

Senior Member
Joined
Jan 17, 2002
Professional Status
Certified General Appraiser
State
Kansas
The most appropriate approach is the one that most closely mirrors the actions of the typical buyer in the subject's market (market equals geography, as well as property type, and highest and best use). If the subject is located in a single family development, which is predominatly owner occupied the income approach will be mostly fiction and should be given little or no weight. As the percentage of rentals increases the number of investor buyers will increase and thier actions will be motivated by the income potential of the property, if the area is in transition to another use the actions of the speculative buyer will come to the front.
 
B

Bemis Pownall

Guest
Single family appraisal=sales approach

Home/subject happens to be rented so income/rental forms are necessary to appease a pesky U/W and you can charge more.

Im assuming buyers in this SF market buy homes to live in and not rent, you just happen to have one which is rented. There really is no income appraoch involved. Sure if you want to sit down and crunch numbers for hours and get a GRM. But you would be working too hard and the pesky UW and reviewers are gunna smack you silly. Just fill out the forms and call it what it is and include the rental/income forms to make everyone happy.
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
If the property is in an area where it is unlikely to be sold to a owner-occupier, i.e.- it is a rent house and nothing more...like apartments....then I would weight the income approach. If one-half the houses are rented and one half are owner occupied, then I might weight the income 50% and weight the sales 50%. Weighting means just that. Weighting does not mean you favor one approach over the other 100%. If this is the only rent house on the block, I would weight the sales approach 100% unless there is some reason the Cost Approach was important (i.e.- new dwelling).

We have some small areas were houses are selling solely to be rented. The values are the market because the buyers are landlords. Several of the buyers are buying the houses and leasing them to the point they are not fit to live in, then razing the structures and building multifamily duplex and fourplexes in their place (the area is zoned 1 - 4 family). Renting for a year or three helps offset the cost of the lot..i.e.- the reason they bought it in the first place. :usa:
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
If you've got a problem with rentals, if you can find one rental and get the estimated value of the home, then you can estimate the GRM for the market. Just explain the limited availability of rentals and complete the forms as best you can. You may have to go back a couple of years or farther away for comps.
 

Greg Hyland

Sophomore Member
Joined
Mar 30, 2003
Professional Status
Licensed Appraiser
State
Wisconsin
Yep....

Find an experienced appraiser in your area to help you.
Give him a split or take him to lunch for the help.
Income properties are difficult to get the hang of it. Once you do, with some help, just as simple as a "normal" appraisal.

Good luck!

GREG
 
Status
Not open for further replies.
Find a Real Estate Appraiser - Enter Zip Code

Copyright © 2000-, AppraisersForum.com, All Rights Reserved
AppraisersForum.com is proudly hosted by the folks at
AppraiserSites.com
Top

AdBlock Detected

We get it, advertisements are annoying!

Sure, ad-blocking software does a great job at blocking ads, but it also blocks useful features of our website. For the best site experience please disable your AdBlocker.

I've Disabled AdBlock
No Thanks