Rental Property Investor · Naples, FL · Member since 2019 · 28 posts · 18 votes
I am getting ready to refi our latest duplex and was wondering what were some things I could add to add value for the appraiser. We have renovated one side of the duplex but I was hoping to get insight on how appraisers come up with their numbers. Is it based solely on comps? Should I be adding curb appeal? I was planning on raising rent. Is income considered? CAP Rate? What is the best way to maximize value so I do not need to bring any additional funds (or limit the additional funds) come closing time?
An appraiser will look at comps and utilize the sales comparison approach (comps and adjust for GBA, sute size, condition, unit count, bed/bath count, etc) and the income approach (comps from mls income producing multi fam units).
as far as improvements, it will depend on your market and what adjustments can be extracted. For example, let’s say there are two identical duplexes as far as bed/bath count, GBA, and site size. Duplex A had laminate countertops, basic appliances, and basic bathrooms and sold for $250k. Duplex B had granite countertops, stainless steel appliances, and updated bathrooms and sold for $275k. Assuming all else is equal, the market is saying an updated duplex will yield $25k more value.
As far as updating curb appeal, I would avoid doing so unless it is a direct update to the dwelling like exterior paint. Landscaping type updates or adding a new fence to a property will get exactly zero value in an appraisal.