Anyone ever appeal an appraisal report for the projected STR rental data?

Question

I have a short term rental in McKenzie Bridge, OR that I'm doing a cash out refinance right now and just got the appraisal report back. The ARV came back reasonable, but on the report, the appraiser only used Vrbo data and no Airbnb data, which many of my neighbors use both platforms. They also put that we have been marketing the property for 3 months, which we just listed it 2 weeks ago so that makes no sense why he would say that or where got that. Our rental is new so he's using projected, but has anyone who has had any new listings challenged the rental data on the appraisal report and been successful and how did you go about it?

Also just to add, we did provide an entire packet for the appraiser of the updates, added value, AirDna data with occupancy rates and market data of neighboring comps. The appraiser also called me to ask these things. Any guidance is appreciated.

Zach Edelman · Answer

@Grace Santos what you can do, although tedious, is gather AirDNA comparables and then use google maps street view to see what the actual address is and send the address, the Air BnB listing, and the AirDNA printout for those specific comparables to the appraiser.

However, a way to make this even simpler would be to just use a lender that can qualify the rental income with AirDNA projections so that you don't even have to go through this exercise and aren't at the mercy of what the appraiser is/isn't willing to do. Plenty of appraisers have little to no experience in STRs as this asset class (if one wants to even call it that) is relatively new in the REI space, and thus, the method suggested above is probably not that likely to succeed.

Adam Windham · Answer

@Grace Santos if your existing lender / appraiser is allowing you to use short term rental income on the appraisal 1007 form, then the best way to rebuttal the income they determined is to provide them with more data. I would suggest an AirDNA report and any other documentation you can get from property managers, other hosts, etc. that support the higher income figure.

This is a big reason why its import to vet your potential lenders to see if they can use short term rental projections from AirDNA, Rabbu, etc. While many lenders will say they can lend on STR's, often times they are relying the appraiser to determine the income on the 1007 which can open you up to this kind of risk. Hope this helps and you are able to get this closed!

Michael Baum · Answer

Hey @Grace Santos, did the appraiser say why he didn't use AirBNB? What about the 3 months?

Appraising is a bit of a scam sometimes. You can't often get them to fix anything and the lenders won't help in any way. Unless there is serious mistakes or malfeasance, you might be stuck.

Have you chatted with the appraiser yet? See what they say.

Jacob Sherman · Answer

What is the actual loan scenario looking like ? Can possibly use the long term rents at 70%-75% no ratio .

Alex Bekeza · Answer

@Grace Santos

On Tuesday May 14th we're hosting a meetup in LA which will feature a guest speaker, CPA Edward Markaryan, who will be going over Tax Strategies for Short Term Rental owners. We'd love to have you join us. https://www.biggerpockets.com/forums/521/topics/1185428-real...

Andrew Steffens · Answer

I have never specifically disputed an appraisal for this but have disputed for other reasons - probably batting around .500. I would collect the data yourself and submit to your lender just like any other dispute. Make sure everything is clear and concise.

James Carlson · Answer

@Grace Santos

That seems odd, but I also think the appraisal and lending world are always five years behind on these things. (Fannie-Freddie just started allowing projected income from ADUs to be counted toward qualification this year.)

Just in general, though, any kind of rent appraisal I see here in Colorado -- be it for short-term rentals/Airbnb or for LTR -- are woefully low.

Anyone ever appeal an appraisal report for the projected STR rental data?

Anyone ever appeal an appraisal report for the projected STR rental data?

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