Rental Schedules Without an Appraisal?

Can you do a rental schedule on a property that you have not appraised? This was a question recently asked in my closed Facebook All-Stars group. Within this private group, we have a couple of hundred appraisers that really enjoy being able to talk with other appraisers. It’s kind of a virtual coffee house where we can all meet up and get advice from our fellow appraisers.

Well, the other day a fairly new appraiser walked into our coffee shop and asked if they could go back and do a rental schedule on a property that they’d already appraised. Several of the more experienced appraisers quickly answered that yes he could and they led him through the process.

However, this brought to mind a similar question that I’m often asked, “Can you do a rental schedule on a property you have not appraised?” The answer is yes you can but there’s a caveat. A rental schedule is a variant of the income approach and, thus, you’re under USPAP obligations.

If you don’t do an appraisal, you’re only doing a rental schedule, the first thing you’ll want to make sure of is that you have all of the information that you need to do it properly. Whether that means that you do a walkthrough or someone sends you the data that you feel is sufficient enough for you to do your job, but make sure that your scope of work matches the assignment. Always remember that you are under USPAP obligation, you still have your appraiser hat on.

For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode: 478

5 Comments on “Rental Schedules Without an Appraisal?”

  1. Pingback: Rental Schedules Without an Appraisal? - Appraisal Buzz

  2. We get requests from time to time for just a rent schedule. If this is for a lender, the most difficult part of the assignment is making sure that the rent schedule has all the supporting signed certifications, scope of work, intended use, intended user, etc… That kind of stuff is not on the rent schedule form because the rent schedule form is meant to be a supplement.

  3. As noted, the opinion of market rent does constitute an appraisal; therefore, SR-1 and SR-2 need to be complied with. When we do a rent survey as part of a typical appraisal assignment, all of the necessary reporting items are already included. As a stand-alone report (opinion of market rent only), I’d argue that the following items are necessary:
    1. Client, intended user(s), and intended use
    2. Definition of Value (in this case, a Market Rent or Fair Market Rent definition)
    3. Summarize the subject’s characteristics sufficiently so the elements of comparison between the subject and comparables can be understood and evaluated; in my opinion, a summary of the H&BU would be warranted but not all agree with me on this
    4. Summarize the SOW
    5. It would be prudent to include some commentary on the rental market. Zillow, Trulia, and a number of other sources can proved residential rental market trends (I’ve used multifamily rental-rate trends as a proxy or supplement, when needed)
    6. Be sure to comment on any prior sale within the last 3 years or any current listing
    7. Identify the approach used (direct rent comparables would be the only necessary approach in nearly all cases)
    8. Include a SR 2-3 signed certification

    As should be clear, Fannie Mae/Freddie Mac Rental Survey form, by itself, does not meet the USPAP minimum reporting requirements. What may be an adequate fee for a rent survey included as part of a 1004 report may not be an adequate fee for a stand alone assignment.

  4. I did one once and will not do a rent schedule again without doing a full appraisal ever again. End of story. It was nothing but a headache.

  5. i do not do them unless i do the full appraisal, there are to many differences between rental properties in my area that make a difference. Such as no rent control anywhere in the state.

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