I recently purchased a 1500 SF two-story rowhouse in New York with a building class designation of Two Family Dwellings - Brick (B1). My partners and I subdivided the property into two distinct rental units:
Unit 1: 2 BR / 1 BA
Unit 2: 1 BR / 1 BA
Given this setup, the property is now being used as a multifamily dwelling. Should an appraiser compare it to other two-family properties in the area?
Our initial appraisal compared the property to single-family homes within a 3-mile radius, which seems inaccurate given the current use. Any insights?
I recently purchased a 1500 SF two-story rowhouse in New York with a building class designation of Two Family Dwellings - Brick (B1). My partners and I subdivided the property into two distinct rental units:
Unit 1: 2 BR / 1 BA
Unit 2: 1 BR / 1 BA
Given this setup, the property is now being used as a multifamily dwelling. Should an appraiser compare it to other two-family properties in the area?
Our initial appraisal compared the property to single-family homes within a 3-mile radius, which seems inaccurate given the current use. Any insights?
Hey,
If "building class designation" is the same as zoning, then this seems like it can definitely be appraised as a two family, with both the legal and actual designation as a two family.
Depending where in NYC, that may not help your valuation, as primary residences sometimes sell for more than investment properties, so check that out before challenging the appraisal and definitely before paying for another one.
Double check all this with your lender/broker as well.
Given that your property has been subdivided into two rental units, it should indeed be compared to other multifamily properties in the area, not single-family homes. The current use of the property as a two-family dwelling significantly impacts its value and marketability, which is distinct from single-family homes.
The initial appraisal comparing your property to single-family homes is likely an oversight, as multifamily properties are evaluated differently due to factors like rental income potential and investor interest. I recommend requesting a review or a new appraisal that compares your property to similar multifamily properties in the area to ensure a more accurate valuation. This will provide a better reflection of the property’s true market value based on its current use.