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Multi-Family Appraisal Reports

by Administrator on Nov 25, 2015 Multi-Family / Apartment 2230 Views

Small multi-family appraisals, on duplexes, 3-unit and 4-unit properties are usually completed on forms with standard Fannie Mae (1025), Freddie Mac (72) and HUD-92264 forms being the most widely accepted.  Forms are widely accepted because they direct appraisers to collect and analyze information that a lender needs to make a loan.

While forms exist for larger multi-family properties appraisers often favor a narrative format.  Large-scale HUD projects and other government agencies however have specific forms and require stringent adherence to rules for completing them.  Appraisers who have gone down this road know just how demanding the forms are and how difficult it is to collected to populate them.

The unit of comparison usually used to analyze multi-family properties or apartments is the dwelling unit.  Total building square feet, room count, unit types and average unit square footage are also important considerations.  A building with all 3-bedroom units may make significantly less than a building with all 1-bedroom units if market demand favors 1-bedroom units.

Appraisers familiar with appraising multi-family buildings understand just how complicated a multi-family appraisal can become.  There may be one building, a few or several buildings.  They may have one or two units in each building or they could be 24-unit or 48-unit buildings.  Many apartment complexes in Las Vegas fall into the 200-unit to 500-unit range and many have been approved as condominiums. 

Analyzing multi-family properties is similar in many respects to analyzing commercial properties since their values rely heavily on an income approach analysis.  Ideally appraised properties have a similar vacancy rate to that found in the market, market rental rates and typical expenses, but of course few properties are model properties.

Also important in the income approach analysis used to value multi-family properties is the establishment of an appropriate capitalization rate.  Most appraisers consider long and hard the appropriate cap rate for a subject property since it is critical to the conclusion reached via the income approach.

The appraisal of multi-family properties is often quoted by appraiser based on the number of units.  The complexity of the assignment increases when there are multiple unit types and many of them.  A reasonable measuring of building improvements, analyzing rental rates by unit type and viewing of several individual units is also considerably more arduous when an apartment complex is large.

Thus multi-family property appraisal assignments can range from relatively simple assignments that include one to a few small buildings to quite complex assignments that include a number of large buildings with hundreds of units and a number of unit types, the extent of the work involved depends on project size, configuration and actual and effective age. 

For more appraisal information contact Glenn J. Rigdon MA, MRICS, ASA is a Las Vegas / Henderson Nevada based appraiser who can be contacted via email or via his business website known as Appraiser Las Vegas  (, or you can also click on “Contact Us” on the home page of this website or visit my public profile at LinkedIn at

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