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Urgent-help Needed

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Jim McGrath

Junior Member
Joined
Jan 25, 2002
Professional Status
Certified Residential Appraiser
State
Florida
I have a condo to appraise in Florida that is rented seasonally. Usually I am able to find enough year around rentals to use to do the income approach, but in this development there are only seasonal rentals.

I read an article years ago on how to handle seasonal rentals, but it was so long ago I don't remember the details now. Can anyone tell me the best way to come up with the answer? The only way I can think of is to use the seasonal rental and try to determine a normal vacancy rate, which seems to vary all over the spectrum, to arrive at an annual income stream.

Jim
 

Don Clark

Elite Member
Joined
Jan 17, 2002
Professional Status
Certified Residential Appraiser
State
Virginia
I live in an area with an adundance of seasonal rentals. You should be able to find lot's of help with Realty companies that manage such properties. So as to not confuse the hell out of the UW I "annualize" the rental income of such properties. For example, I take the total earnings annually for such a property and divide by 12. However, I also collect data for each part of the season in the event the UW wants to know what the property earns in each quarter, or each month. Once I collect the total, I divide that by 12, factor in either the actual or a market vacancy rate. Not hard to do. Most investors want to know what they can expect to earn annually.

Don Clark
 

Fred

Elite Member
Joined
Jan 15, 2002
Professional Status
Retired Appraiser
State
Virgin Islands
Is there any reason that this unit would sell for a different price than other units in the same project? Why isn't this a basic direct sales comparison excercise?
 

Restrain

Elite Member
Joined
Jan 22, 2002
Professional Status
Certified General Appraiser
State
Florida
Annualized income is a good approach, especially if you have a rental history. However, I would be sure to discuss the actual income stream and the seasonal nature of the property.
 
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