406.04: Selection of Comparable Rentals

In developing the valuation for a two- to four-family investment property, the appraiser must analyze the most current and most comparable rental properties that are available to develop an estimated market rent for the subject property.  The appraiser must report and analyze at least three rental comparables (which do not have to be the same comparables used in the sales comparison analysis).  The appraiser should reconcile the comparable rental data and provide support for the estimated market rents for the individual subject units, providing information about lease dates, number of vacant units, actual rents, and estimated market rents for the subject property.  The appraisal report should assure the lender that the units and properties selected as comparables are comparable to the subject property (in terms of both the units and the overall property) and accurately represent the rental market for the subject property, unless the appraiser states otherwise in the report.