Module 5,6&7 Flashcards
gross lease
landlord pays operating expenses
net lease
tenant pays operating expenses
categorized rental payments
flat lease - payment do not change during the course of the lease
graduated lease - rents go up or down at specific points during the lease
revaluation lease - rents adjusted at a specific point during the lease based market rental rate of space
index lease - rent is adjusted periodically according to an index such as the CPI, cost of living
percentage lease - rent is based on the biz activity (retail sales) of tenant
contract rent
identified in the lease
Note: est. a mkt rent- the probable rent that the property should bring in a competitive & open mkt used to determine if contract rent is above or below mkt
scheduled rent
rent due under the lease often the same
Note: when calculating scheduled rent, adjust rent for concessions, discounts, or other benefits that induce a prospective tenant to enter into a lease
effective rent
rent stipulated in a lease over a specified term minus concessions
deficient rent
mkt rent exceeds contract rent
excess rent
contract rent exceeds mkt rent
average rent
percentage of rent paid over & above the guaranteed minimum or base rent contract rent; calcu as % of sales in excess of specified breakpoint sales volume
fee simple interest
based on mkt rent the property is capable of achieving
leased fee interest
based on existing contract rents for leased space & mkt rent for vacant & owner occupied space
potential gross income
total rent possible if property pays 100% occupied
PGI-vacancy+collection loss=effective gross income
egi
anticipated income from all operations of real property after an allowance is made for vacancy & collection losses. $$ the PM is expected to handle during the next 12 months or come to be collected during the next 12 months
expenses
*fixed expenses - property taxes & insurance that must be paid regardless of occupancy or vacancy
*variable expenses - mgmt charges, utilities, repairs, or maintenance
*replacement allowance -roofing, carpet, boilers,& driveway
total operating exp
fixed exp+variable exp
quality design & construction
play a significant role in valuation
1) identify major components of the building
2) recognize the primary valuation issues to observe in each component
components that appraisers should observe
1)foundation
2)framing (floor & wall supports)
3)roofing
4)plumbing
5)electrical wiring
6)HVAC
foundation construction materials
*poured concrete
*insulated concrete forms
*concrete block
*permanent wood foundation
*fieldstone, rubblestone, & brick - old or historic residences
3 types of foundation
*slab
*pier
*stem or basement wall
slab foundation
poured concrete on ground level
stem wall
a slab with add’l structural poured concrete support (either footings or grade beams) along its perimeter
piers
poured concrete or wood floor elevated above ground (results in a crawl space)
wall foundation
basement or crawl space is present & they form the structural foundation for upper floors of the structure
foundation issues
*adequate drainage
*settlement cracks
*signs of termite
*any wood in contact with the ground
*moisture infiltration or chronic water problems
framing systems
skeleton of building, what holds roof & walls
*wood, steel, & concrete
wall covering materials
*paneling
*gypsum board
outside is covered by siding or masonry material
common wall frames
2 types: platform construction & balloon construction
platform frame
construction where wall frame sits on top of subfloor, each story built up as a separate unit
balloon frame
studs extend from sill to roof; 2nd floor is supported by horizontal ribbon or ledger board & joists nailed to studs
More popular during WW2
Used today to build vaulted ceilings
Other framing types
concrete block & stucco (CBS), structural insulated panels (SIPs), prefabricated walls, metal stud framing (common in commercial & industrial applications)
structural steel framing is common in high rise condominiums
roofing
*flat roof - least expensive
*complex roof - steep or pitched roof, more expensive
assessing roofs
*sagging rooflines or water damage
*adequate ventilation apparent
*condition of roof covering
*is flashing missing or damaged
*gutters in good condition
common types of roof designs
*flat
*gable
*saltbox
*hip
*gamble
*mansard
*shed
roof covering
composite shingle
wood shingle
wood shake
clay tiles
slate
plumbing components
supply system - how water gets in & is distributed
septic - how waste water is collected, moved out of the building
mechanical - plumbing fixtures & appliances; water heaters, sinks, toilets, fixtures, & bathtubs
private plumbing system
private well/septic system
prone to contamination
appraiser to ask owner of septic issues
house design
*one story
*one and one half story
*2 story (include 2.5 story homes)…colonial, victorian, & modified 2 story
*split level (includes multilevel splits)…raised ranch, bilevel
*contemporary design (those that dont fit…modern, art deco, pueblo…in the prior 4 categories)
*specialized designs ..do not fit into the other categories…geodesic dome earth sheltered
