How much would you reduce the after repair value of a house across from a dairy farm? I grew up working on such a farm and understand that there are smells and flies related to such a business. However, I enjoy farms so am not able to look at it objectively.
For houses that are on a busy street, I reduce the value compared to comps that are on quiet streets by about 15%. I have had great success with this strategy. Is there a similar % reduction that I should use for being across from a smelly business?
That is a tough question. It will be very buyer specific. Are dairy farms common in the area? If so, it may not be a huge deal. If this is the only one, it may be a big deal. One of the areas I invest in has a paper mill, and the locals are used to it and its smell, so you don't have to discount for it.
Are there other houses besides this one? If so, maybe go get the opinion of those owners about the conditions there to help make a decision. I imagine winters don't smell so bad, but summers are rough. Do trucks come and go all day, or maybe just a few during business hours?
If its the only house...maybe for a reason, and I would be extremely conservative.
Something you could also do is check the last sales history, and compare that to other houses that sold that same year. I had to do that for a home in a historic district once. You take the percentage and apply to today's CMA.
I would think it depends on the area. I live in a rural area, so dairy farms are no big deal... but houses in the smell radius of the mushroom factory are a different story. Driving by in the morning when there's a chill in the air and the compost is being turned... ugh.
For the life of me, I can't figure out how the people near that business can stand living next door to literally steaming piles of sh*t.
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