Property Value Breakdown - Land v Building

[Mark Grozen-Smith]

Hey BiggerPocketsers (ya we really need a term for this community 😂)

My teammates in insurance/accounting and my CPA are frequently asking me how much each property in our portfolio is worth with a breakdown of land vs building value. Do you have any idea how that breakdown is typically done? The appraisals are where I would expect, but none of our appraisals do that.

Thanks!
Mark

[Bill B.]

it's really market dependent. Long ago in Vegas I used 20-80 for land/building, because there was a big obvious market for land, and built houses. That's pretty much gone away. On the other hand I have two lake properties in MN. One is a townhome where I only owned from the studs in, so I deprecated the whole thing. I also own a pair of cabins. When I tried to fight the property tax assessment they told me the land was worth more than I paid for the cabins and the land.  It was such a cheap property ($50k), I didnt bother depreciating anything.

You could ask your insurer for "replacement value" insurance (Since you probably want that anyway unless you would leave any burned down buildings unreplaced.) They'll come up with a professional value that I don't think the IRS would come down hard on. (Being off by 10% will result in a $364 deduction difference per year per $100k in value. (Maybe a $70 difference in your taxes for being pretty far off.))

Ps. The cabin story reminds me, you can look at your county's property tax statement. Everyone I've seen breaks down land vs improvements in the taxed value.  You don't have to agree with the numbers, just use the percentage of each.