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Using a listing of subject property as comparable

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JTRock

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I am writing up a comparable rent schedule for a property and it was just recently rented. I know USPAP allows for previous sales of a subject property as a comparable and so i'm assuming it carries over for rent analysis as well. If I am wrong please say so. Any ideas on how to write a statement so the lender doesn't send it back and ask to have it taken out?
 

Mark K

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Indiana
I am writing up a comparable rent schedule for a property and it was just recently rented. I know USPAP allows for previous sales of a subject property as a comparable and so i'm assuming it carries over for rent analysis as well. If I am wrong please say so. Any ideas on how to write a statement so the lender doesn't send it back and ask to have it taken out?


If I'm reading this correctly, you want to use the rental data from the subject as one of your rent comps?

Personally, I'd wouldn't do it. The goal is to establish a Market Rent for the subject by comparing it to other similar properties. I suppose you could put it in as a 4th or 5th rent comp, but why? You'll be reconciling the comps vs. the subject anyway.
 

JTRock

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The reason I am putting it in is because the truest representation for the subject's rent is its most recent history. It logically makes sense to use that as a comparable sale. It rented for $1,500 and other rental comps in the neighborhood also rented for $1,500, although I only have two that are at that price and then there is a large dropoff.
 

KD247

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Your idea does make sense logically, but most lenders will see the lack of a third comparable property as an attempt to conceal any market data that doesn't support your conclusions. I would either find another comparable rental that is similar to the subject, or bracket the subject with a third and fourth comparable rental.

Giving them the information they require will be much easier in the long run.
 

Joyce Potts

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Use it and thoroughly disclose, discuss and analyze it. Bravo! Common sense is alive and well.
 

RSW

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Tennessee
If you have two that are at 1,500 and others that fall off from that, then there has to be a reason. Use one of the other rentals and adjust for the difference. I would not use the subject as a primary 1,2 3 rent comparable.
 

TJSum

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Maryland
If you have two that are at 1,500 and others that fall off from that, then there has to be a reason. Use one of the other rentals and adjust for the difference. I would not use the subject as a primary 1,2 3 rent comparable.

I agree. If you are going to use the subject data to "prove itself", why even bother with an appraisal...
 

timd354

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If you have two that are at 1,500 and others that fall off from that, then there has to be a reason. Use one of the other rentals and adjust for the difference. I would not use the subject as a primary 1,2 3 rent comparable.

Absolutely correct.:clapping:
 

KD247

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California
If you have two that are at 1,500 and others that fall off from that, then there has to be a reason. Use one of the other rentals and adjust for the difference.
I agree with that also, but if the third rental is significantly inferior than the subject, I bet the underwriter is also going to want to see a bracketing fourth rental that is superior to the subject.
 

AnonApprsr

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Jan 21, 2008
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Massachusetts
My Boss tells me, whenever I say something along the lines of "but...", do your best, and make sure your best can't be bettered by another appraiser. Everyone has the same data Anon, just do it as good as anyone else could.

So what if she asks for a better rental comp? If there isn't one, there isn't one!
 
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