Subject proprty has full tennis court, how to approach adjsutment?

[KJR2008]

This is a first for me, Subject has a full tennis court in a area where there is no similar sales to speak of. The subjects sits on two typical size residential lots, twice the size of most homes in the area, the tennis court is on the second lot, any help on how one would adjust for this, not like I can extract a adjustment from paired sales. Would appreciate any thoughts on how to approach adjusting for the tennis court and should the CA reflect functional depreciation?

 

[Terrel L. Shields]

I would be inclined to make a cost related adjustment. Find the cost of the court, apply the dwelling age vs say a 20 year life (suspect it to have a shorter life than the dwelling... then apply a discount as an over-improvement... perhaps using the same % discount that I might apply to a pool or fancy entry gate...

Finding a paired sale...well, that would be a dream I suspect.

 

[Jerry Bone Jr]

...I can extract a adjustment from paired sales.

it's hard to believe that no "tennis court" property has sold in the last x years. Perhaps you could expand the search.

 

[Doug Wegener]

tennis court

This is a first for me, Subject has a full tennis court in a area where there is no similar sales to speak of. The subjects sits on two typical size residential lots, twice the size of most homes in the area, the tennis court is on the second lot, any help on how one would adjust for this, not like I can extract a adjustment from paired sales. Would appreciate any thoughts on how to approach adjusting for the tennis court and should the CA reflect functional depreciation?

Check a competing area in the same price range. Reproduction cost would set the high end of your adjustment.

N/S Tennis Courts are the most desireable.

 

[J Grant]

If it were me, and there are no other tennis court sales (or listings) in area, I would give it no adjustment. The owners built it for themselves, it takes up valuable land that can be used for a guest house or garden or other uses. How many people play tennis, and do they need their very own court? Though it might appeal to some buyers, others might pay to remove it. And, if the subject is in an upscale area with two lots etc, any buyer looking at that price range/type of home one would think would have enough $ to build a court if they wanted to. The fact that there are no tennis court sales, show few people in the area want them on their property.

The only other way to prove an adjustment, if you think there should be one, is fo find a comp with another amenity, re, a bocce ball court or pagola or other such feature. Speak to a few realtors active there, ask them if their buyers would pay more for a tennis court or not. Then, if you choose not to adjust it, explain why.

 

[Lisle]

I would be inclined to make a cost related adjustment. Find the cost of the court, apply the dwelling age vs say a 20 year life (suspect it to have a shorter life than the dwelling... then apply a discount as an over-improvement... perhaps using the same % discount that I might apply to a pool or fancy entry gate...

Finding a paired sale...well, that would be a dream I suspect.

I would use this approach as it provides provides a reasonable argument for the adjustment.

Trying to extract the tennis court from a paired sales analysis is probably less credible when you consider the type of properties that typically have tennis courts.

 

[Mike Kennedy]

"two typical size residential lots, twice the size of most homes in the area, the tennis court is on the second lot,"


two separate lots ?? Were they merged into a Single Lot?


More details on:

1. exactly what the Subject of your assignment actually is?
2. client type?
2. intended use?

 

[J Grant]

re the cost apraoach, res appraisers are supposed to extract the market accpetance of an improvement, not how much it cost! Before doing a cost approach on a tennis court and find out it cost 40k to build, call realtors in area and ask what their buyers think of homes with tennis courts. If there are no sales in area and in driving around you see no tennis courts, or one in 400 homes, there is very low demand for them. Again, it is what the "typical buyer " would pay. If nobody in the area is buildign tennis courts, it is because typical people in the area dont' want them. They take up a lot of land, require maintenance and are ugly to look at.

If you have an individual buyer who is a tennis nut, they would pay for it as an amenity, but it seems like they are not the typical buyer here. Again, drive around, do you see tennis courts in other yards in the area, ? Talk to realtors as well. That, and no sales or listings with courts would lead me to talk about the tennis court, but make no adjustment for it.

Again, many buyers might pay to remove it, in some areas it would even need a negative adjustment but I would just make no adjustment.

 

[hastalavista]

Tennis courts are common in some of my markets and uncommon in others.

Where they are common, I can extract an adjustment the old fashion way.

Where they are not common, I typically find that they add no value to the property. A survey of brokers (market participants) can be very helpful in providing market support for an adjustment or no adjustment in such atypical cases.
Since a tennis court is a recreational amenity, based on the market participants' feedback, it may be a similar amenity (and adjustment) to a pool.

Good luck.

 

[J Grant]

it may be a similar amenity (and adjustment) to a pool.

I agree with Dennis assesment of when to adjust for them excpet the last statement...re, pools are pretty to look at. Even people who don' swim enjoy looking at the water. Pools also take up much less land than tennis courts. And so a non swimmer may even pay a bit more for a pool, figuring it is pretty and their friends might use it when they visit, it is doubtful non tennis people would want to look at a big ugly concrete court with a fence around it ( let alone a clay court that needs maintenance).

Like Dennis said though, in an area with a number of courts as comps, you can extract an adjusmtent, if there is any to be found.