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Updated over 4 years ago,
ADU Valuations-Appraiser Insight Request
Hey guys-I'm putting the finishing touches on an ADU project and I would love some insight into how the property will be valued now that the ADU is finished. Let me provide some details-
The property is in an A- neighborhood in Atlanta.
Main house is a 2/1 1100sq ft (appraised for 375k in 2017)
The ADU is a 2/2 730sq ft. It's detached from the house. I'll be renting it out to friends for $1600/month but market rent is closer to $1800-2000/month.
I would love an appraisers insight into how to value a property that will be difficult to comp. In my area, ADU's are typically used in properties with a very large main house, so there are very few (if any) properties in my hood that could be used as a comp.
Side note-I've refinanced several properties in the past and as a general rule, appraisals on refinances have come in about 12-15% below what I expected. I've heard other investors talking about this same issue, anyone have some thoughts on how to correct this(other than adjusting your ARV by 15%)? When the house across the street sold 30 days ago for 165k and you refi a fully updated comparable home, with added garage, and it appraised for 142k-I have a hard time understanding. Any thoughts would be appreciated!
-Jackie