Uhaul rental income in Mini Storage complex

[NachoPerito]

Hey y'all. I am analyzing a self storage property that has a good amount of income from renting uhauls. Do you totally throw out the income because it isn't based in the real estate or do you include it?

Do you modify your expenses? For example, if the manager didn't have to rent uhauls he could work less, etc.

Thanks.

 

[CANative]

When I do these for property tax appeal purposes the assessors almost always include the income from the rental operation.

 

[leasedfee]

Do you totally throw out the income because it isn't based in the real estate or do you include it?

I would throw it out for fee appraisal. Business income.

Do you modify your expenses?

Yes.
And there might be, say, surplus/excess land where trucks are stored, and which case would use land comps to adjust for it is superior to a equivalent subject without such land.

 

[Michael S]

I typically include it in the other income along with things like the sale of locks and packing supplies.

 

[BRCJR]

I would throw it out for fee appraisal. Business income.

Yes.
And there might be, say, surplus/excess land where trucks are stored, and which case would use land comps to adjust for it is superior to a equivalent subject without such land.

Do you count vending machine income in a hotel appraisal?

 

[CANative]

The Coke can method?

 

[NachoPerito]

hmmm. Doesn't seem like a consensus yet.

 

[PL1957]

hmmm. Doesn't seem like a consensus yet.

That's because there's no bright line here. You can argue what should be included in the business until you're blue in the face. All you can do is consult with the client to make sure you understand how they're underwriting the loan. There is no right answer - just explain what you did and stay consistent throughout the report.

 

[CANative]

What about a Uhaul center that has onsite mini-storage?

 

[CANative]

BCJR ... I wasn't being completely facetious about "The Coke Can Method."