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Derek Meyer
  • Rental Property Investor
  • Largo, FL
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Duplex Appraisal Question

Derek Meyer
  • Rental Property Investor
  • Largo, FL
Posted Apr 10 2021, 18:24

My wife and I just bought our first duplex. With our local market we got into a bidding war above asking price but I bet that others are not considering the recent hikes in rents in my area.

Purchase price: 283,000

Rent: $1,350 per unit

Appraisal: $270,000

The duplex was vacant at the time of the appraisal and the estimated 1,075 per unit and came to the appraisal amount of $270k by multiplying the estimated rent by 125 (average Gross Rent Multiplier).

A) since I have successfully filled both sides of the duplex with tenant paying $1,350, is there anyway I can capitalize on the presumed equity this could add? Actual rent of $2,700 multiplier by 125 GRM would have given an appraised value of $337,500. Or is this largely irrelevant since it is 1-4 unit property?

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