Valuing between different types of multi-family buildings
I'm working on a project for my valuations class and came into a question when using the sales comparison approach. My building is a low-mid rise and one of the comps I'm thinking of using is a high rise. Would I have to make any adjustment for that or not?
[{"id": "hmqa1qz", "text": "Are the units approximately the same size br/ba count?  Using sales comps, I wouldn't think of the highrise as a comp. The adjustment would be extreme.  \n\nIf we're talking about a 3rise vs a 4rise, and same unit sizes/br/ba, then you could be able to get away with it. Same area, recent sale, same rents, etc.Then you have a comp.  You would adjust the highrise down probably.", "replies": [], "depth": 1}, {"id": "hmqbbpq", "text": "would need more info, but more than likely, not a good comp", "replies": [], "depth": 1}, {"id": "hmqvh5t", "text": "I\u2019m just a lowly residential appraiser, so I get that it\u2019s very common to have situations where you have to use comps that are less than desirable. \n\nI suspect that with a garden style versus a high rise that you would also need to adjust for location, amenities, and interiors/rental rates. \n\nPeople are saying that these properties are not comparable, but it should be sufficient to assist in determining a reasonable cap rate.", "replies": [], "depth": 1}, {"id": "hmrwdng", "text": "Realistically, the unit condition, size, amenities, and general area are going to be much more important 9/10 times than the type of building itself, unless it's a garden type property vs high rise. You could make an adjustment but it's obviously not going to be ideal, this is something you'd do only if you absolutely had to. Otherwise you should always stick to same type of building.", "replies": [], "depth": 1}, {"id": "hms37lk", "text": "You do not use a sales comparison approach to value multi family buildings. They are priced off of their NOI and CAP rate, not comps. But if you must, something similar would be best? High rise vs garden, likely not a good comparison.", "replies": [], "depth": 1}]