Which Approach to Value an Addition to a Daycare in a Dwelling

[J Grant]

You don't need a current sale to identify how such a property has previously sold or rented relative to other property types.

Exactly - a 2, or 3, or 5-year-old sale tells a story- buyers and sellers were the same now as then, just some market conditions or price trends have changed. We all were appraising,2, 3 and 5 years ago. A reasonable search radius out as well - whatever that is - 10 miles, idk just putting it out there.

 

[Terrel L. Shields]

how many acres of land is it on>

Quarter acre. As is and as proposed, it is not livable as a house. But a Daycare is legal under city fiat (they don't have zoning per se)

 

[J Grant]

Imo, re agents are a good source - ask who they think would buy that property, and how many income or commerical or mixes use buyers are looking for day care centers -

 

[J Grant]

Quarter acre. As is and as proposed, it is not livable as a house. But a Daycare is legal under city fiat (they don't have zoning per se)

What other light commercial uses besides day care are the buildings suited for

What would you estimate the cost would be to make them liveable as a house, or modify the buildings for use other than day care?

 

[George Hatch]

Quarter acre. As is and as proposed, it is not livable as a house. But a Daycare is legal under city fiat (they don't have zoning per se)

Not livable as a house changes things, ya? Because one of the alternatives in an HBU analysis is as conversion bait for a different use or occupancy.

I could see a small religious group using a property like this for meetings and a private school. I could see a social services agency converting this property into a group home or halfway house or rehab facility or whatnot.

 

[J Grant]

Not livable as a house changes things, ya? Because one of the alternatives in an HBU analysis is as conversion bait for a different use or occupancy.

I could see a small religious group using a property like this for meetings and a private school. I could see a social services agency converting this property into a group home or halfway house or rehab facility or whatnot.

Agree - T think the cost approach is the answer, but I would ask this ( I am inventing numbers for example )

If it costs 600k to buy vacant land and build a replica of the Subject's new

but the most probable price of the subject might be 425k, and it costs 75k to adapt it for X use -which makes more sense to a buyer?

We did not see the property, but he mentions it is in a residential area it might be retrofitted one half for SFR and the other half as an ADU rental or unit rental ot make it into a duplex or mixed commercial or group home etc if zoning allows -

 

[George Hatch]

As a tangent, as housing gets more expensive, "group living" may become a more economically viable form of occupancy for low income singles and couples.

 

[Zephyr999]

Why is MLS the only comps resource?

Daycares are investment properties too...

 

[J Grant]

As a tangent, as housing gets more expensive, "group living" may become a more economically viable form of occupancy for low income singles and couples.

Idk if it applies here, but a dated assumption was that commercial use was a higher HBU then residential, but with demand and price of res properties outstripping commercial in some areas, that is no longer a default assumption,

Daycare and group homes are sort of a low-level upgrade from residential use- idk if real commerical use is allowed in this res area - -

 

[J Grant]

Why is MLS the only comps resource?

Daycares are investment properties too...

My MLS has a business and investment section of sold and listings for commercial or investment properties.