Single Family Comparable Rent Schedule

[Appraisal Santa Fe]

A difference of 200 SF among houses that are anywhere from 800 sf to 1200 sf is a significant difference.

Such a difference among houses that are +-2500 sf (and more) is not so significant.

Tell us something about the subject property and the set of market data that you have to work with.

Yes, I agree and understand the difference when doing a single family but for a rental does it carry the same weight?

What I have is a small single family house (800 sq ft) that is rented for $X.
I've found a few properties (rental info is a pain to dig up) that are similar in size and down to almost half as much for similar rent. One problem I'm having is coming up with enough data to make adjustments.

 

[Greg Graybadger]

As you know, Santa Fe real estate is very sensitive to location. The principles for determining market rent are essentially the same as for determining value. You need to understand the renter's motivations. Sure, size and utility (as expressed by bedroom count) are important. But there are many other important factors. Put yourself in the shoes of the renter. Foothills view, walk to the plaza, ritzy neighborhood, good schools, etc. equals higher rents. High crime, junk cars, front door faces high traffic, 20 minutes from downtown, etc. equals lower rents. Just figure out how your subject compares.

As for the difficulty in obtaining comparable data, the solution is effort. Build relationships with other appraisers, property managers, and realtors. Ask the neighbors. Seek out the same resources used by renters looking for a new place. Good luck.

 

[Appraisal Santa Fe]

deleted

 

[Appraisal Santa Fe]

Thanks Greg,
I wont be doing many of these. I've used every avenue I can find to get data.

Now I'm coming up with a number that is below what the subject is renting for.
This is driving me nuts. Will that send up a red flag?

I've asked every appraiser I know and they all say they wont do the rent schedule report :blush:

 

[Appraisal Santa Fe]

I've also forgotten how to come up with a Gross Rent Multiplier.
Geeze, its been a long time... argh

 

[Lee Lansford]

Thanks Greg,
I wont be doing many of these. I've used every avenue I can find to get data.

Now I'm coming up with a number that is below what the subject is renting for.
This is driving me nuts. Will that send up a red flag?

I've asked every appraiser I know and they all say they wont do the rent schedule report :blush:

IF reliable data are so very scarce to impugn the reliability of what you are doing, I take it that the request for the rent schedule is based merely on the fact that the borrower is using the property as a rental unit...yes? If such is the case, be certain to include comment that the rent schedule is provided to the client based solely on their request for same and that data available for your development of market rent is extremely limited.

And...the client is not also asking you to communicate the Income Approach...or, are they so asking?

 

[Hamlet]

I've also forgotten how to come up with a Gross Rent Multiplier.
Geeze, its been a long time... argh

SP/GMR = GMRM
SP/GR = GRM

 

[Ken Youngkrantz]

You need to be talking to the people at the rental management companies. I have found them to be very help ful. Sounds like you may have a location difference. But, you have to be careful, it is not uncommon for a house in a "bad" part of town to rent for more than the same house in a "good" part of town. I would advise to you stick with rentals that are thru management companies. you might compare sales of comparable houses near the different rentals you have. There is no "list" for the GLA adjustment on rentals. how are you adjusting for number of bedrooms, garage spaces, number of bathrooms. I have done enough of these that in certain markets I do have a list, based on past experience, rental management files and what renters tell me. These are not uncommon around here at all. I do about one per week. Hint: you have to drive your rental comps and take pictures or you have no idea what you are comparing.

 

[Green Hornet]

Is possible that the the borrower may have inflated the rents for the subject? Were you able to ask the renters what they were paying?

Remember, you are trying to determine market rents, not support the rent that the owner provided.

 

[PropertyEconomics]

Does Santa Fe MLS have a Residential Rental section? I often run those here in Albuquerque to find rentals as well as contacts to talk to about rentals. Just a thought.