Multi-family properties can range from stratified developments to single title properties of various qualities and characteristics. Multi-family appraisal and consulting services are required for many purposes  including sale or  purchase, finance, divorce, estate or  tax settlement, investment, strata and insurance   policy requirements,  bankruptcy/foreclosure, investment, financial planning, mergers and more.

An appraisal valuation, estimates a property’s market value by comparing it to similar properties recently selling in the area.  Most properties are never exactly alike, so adjustments must be applied the comparables sales to make their values most reflective of the subject property, resulting in adjusted values of each comparable, indicating a price or value it would have sold for if it had the same components as the subject.

Typically, Multi-family properties will be completed in a Regular or Short Narrative Format including  details about the subject property such as physical, financial and location aspects, commentary on potential issues or qualities and characteristics that the appraiser deems impactful to the property’s value, positive or adverse, a comparison of similar properties- typically three to six properties with descriptions, that have sold of recent or applicable time frame, an overview of the overall real estate market in the area, competitive market, a comparison of average sales time of comparable properties and/or estimated exposure and/or estimated marketing time for the property. A review of listing history of the subject property will be research for the past 3 years.

In most circumstances, multi-family residential valuations, utilize three valuation methods, the Income Approach, the Direct Comparison Approach and the Cost Approach.

• The Income Approach: The Income Approach is a valuation method used to estimate the value of income producing real estate. It is based upon the premise of anticipation or expectation of future benefits. This method converts anticipated cash flows into present value by capitalizing” net operating income by a market derived capitalization rate. This capitalization rate is extracted from sales of similar investment properties and applied to the net income of a subject property to determine it’s value.
  
  
• Direct Comparison Approach: An appraisal valuation, estimates a property’s market value by comparing it to similar properties recently selling in the area. Most properties are never exactly alike, so adjustments must be applied the comparables sales to make their values most reflective of the subject property’s.  Resulting in adjusted values of each comparable, indicating a price or value it would have sold for if it had the same components as the subject.
  
  
• The Cost Approach: The Cost Approach estimates how much it would cost to replace the structure, with an applied depreciation for the subject improvements, adding in land value and site improvements -estimated cost.