COM 0024.018 2012-2014 - Laserfiche WebLink

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• To define the type of data that would be required to employ the income approach from the market's point of view they would not necessarily have to get current rent rolls as that are simply a record of the individual property owners • Contract rents are not market rents • Somebody could be a long-term tenant there and give them fifty percent (50%) rates and what are you going to do with that? Not a whole lot • So they would not have to collect things like contract rents • They could develop the average expenses for a particular property type • They could go to the market and do rent surveys and find out what the market is paying at a given valuation time then identify that type of data and define a system • That is something that has not been done before • They have got some experience in terms of what would be required but I think the starting point would be to define what it is that would be the drivers on and the units of measure, whether it is revenue per room or something else. • It could work without a whole lot of additional expense if they targeted the right kind of specific information for each property type and then began the collection process and made it work • That would balance the see-saw a whole lot and it would be a much fairer way • For income producing properties, while they consider the cost approach and sales comparison approach there is so little data • Eighty-one sales in five years, how are they going to get precise in terms of valuation? It's a throw away • They go through it because they are required to by USPAP or whatever • Thinks it is a very doable thing and as a committee member, welcomes their definition of the key elements of data that they would need to drive this system • Perhaps recommendations on what additional costs that would impose • It is a new system although it may, if they switch to reliance on the income approach where appropriate and do not do as much work on the sales collection data and the cost approach which are staple but to be aware of the improvements made by an owner • When a hotel built in 1976 or 1967 gets refurbished, that kind of information about the physical condition, marketability, etc , is important too • Thinks definition of the key piece of information they would need is an estimate of what the additional cost there might be as there will be some savings too if these property types were to shift from the method used before to a reliance on what they - 0 -