Two houses on one lot

[Chris Blanchette]

Hello, I am working on a property that has 2 single family houses on one lot on a lake. The town looks at the property as a 2 family. Each house has a seperate well, cesspool, electric and heat. The problem is that the second house has not been occupied in years, the pipes had burst year ago, due to improper winterization. No utilities/heat were active at the second house. The house is fine, other than peeling paint, but has no functioning ameneties. I am trying to figure out if I am going to appraise it as a 2 family, with conditions regarding fixing the heat/plumbing/utilities or as a single family with outbuilding and no utilties. Disclosing to the client the condition of the dwelling.

The owner says she has never rented it and had just used it for summer family/guests. As family grew, it never got used. But she never considered it to be a rental property.

Any advice?

 

[Delta85]

You're gonna need a bigger fee.
http://www.youtube.com/watch?v=8gciFoEbOA8

 

[Michigan CG]

The four tests of Highest and Best Use will answer your questions.

 

[CANative]

Is there a large difference in size between the two structures?

 

[Joyce Potts]

Two living entities equals a duplex, however, make sure it's zoned for a duplex or grandfathered-in or if the extended vacancy has some local zoning caveat that has usurped the legal, non-conforming use as a duplex. With that said, the highest and best use is the primary consideration, but it's not always that simplistic. This is why using 'extraordinary assumptions' can be your new BFF.

 

[Mr Rex]

Two living entities equals a duplex, however, make sure it's zoned for a duplex or grandfathered-in or if the extended vacancy has some local zoning caveat that has usurped the legal, non-conforming use as a duplex. With that said, the highest and best use is the primary consideration, but it's not always that simplistic. This is why using 'extraordinary assumptions' can be your new BFF.

A duplex is typically 2 dwellings under the same roof. What usurp been smoking?

 

[Mile High Trout]

What usurp been smoking?

Wait I know this one! It's a Jefferey!

http://27.media.tumblr.com/tumblr_le2m7nhzuS1qzgbiyo1_500.jpg

Those are take him to the greek references, in case you're out of touch with popular comedy culture.

Answer: Contributory value. Plain and simple.

Does the market accept such use, and show positive valuation gains for such a use?

 

[Sid Holderly]

2 house lot

This is not totally uncommon on the lakes in my area. Most of the time they are grandfathered and can remain unless extensive exterior work on the less used or unused unit takes place (get the limitations at the building permit application). The living areas range from 1 bedroom apartments over boat houses to complete stand alone homes. Most of the time they were the original house on the lot and the new house was built before the County had zoning rules and regulations.

Appraisals have been accepted with them listed as a house with an accessory unit (check box on URAR). Most of the time a very limited additional value is attributed to the accessory unit, they are generally small in this area.. If it was nice a separate grid with comps the size of the accessory unit would be included. In poor condition it might be a negative value (as it might have to be removed to make the subject more salable).

Since they are not the primary residence they typically would have less value/sf. Many buyers would not want an extra place to maintain therefore functional discounts. A few lakefront buyers have regular guests and they may like keeping the guests out of the main house, so it does have value.

There are generally a couple of comps a year with two homes per lake front lot but they are difficult to glean from the MLS. Some MLS systems have a searchable remarks line that can be searched for "apartment, 2nd home, income potential". I try to keep a file of these oddities for future reference. Turnover on lakefront properties is high so they may be encountered again.

 

[Joyce Potts]

A duplex is typically 2 dwellings under the same roof. What usurp been smoking?

Where's my gun. You know better than that. Tell me you're pulling my chain.

 

[Chris Blanchette]

The main house is 1400 sf and the guest cottage is 640 sf. I am going to do it as a single family with guest cottage, with FHA conditions for the utilities to be repaired. It is not common in this area, so finding comps will be a blast!

Thanks for your help