Posted by Andrew Smith (Phila) on October 29, 1998 at 06:37:09:
You mention that the monthly income is $1,925 but you did not give any indication as to what the expenses for the property are. Be sure to take the following into account: Property taxes, insurance, utilities, trash collection, maintenance, capital improvements allowance. After deducting all expenses (other than mortgage payments) of the property that leaves the net income which is a better factor to work with in determining value.
Need help on Multi Family Appraisals - Posted by Fred in Ohio
Posted by Fred in Ohio on October 28, 1998 at 23:59:05:
I found a 5 family rental that I am trying to crunch the numbers on but I’m not sure about my appraisal estimate. Aren’t the appraisal values of multi-unit buildings based on the income they produce? The old appraisal (which I haven’t seen) was done 7 years ago for $78,000. The current total monthly rental income is $1925.00. Seller is asking $55-60,000.
Please help on this newbie question!
Thanks,
Fred
Re: Need help on Multi Family Appraisals - Posted by L.G. Neal
Posted by L.G. Neal on October 29, 1998 at 13:31:49:
Hi Fred. Andrew is correct. You need to determine and VERIFY the expenses for the building. Ask the seller for a history of expenses and call your local utility company for past records. Other concerns include; researching the property at the courthouse; find comparable properties that have recently sold; get a handle on the neighborhood(is it mostly single family homes or mixed?); determine what you intend to do with the property; get a thourough inspection done by a qulaified building inspector; and, then, make an offer that you can live with. Good Luck!