Rent Comp Study (RCS)

If you need an appraiser, go to

 http://www.appraisalfoundation.org/html/consumer.asp?FileName=consumer

or

http://www.appraisalinstitute.org/

If you need  assistance in preparing a request for renewal of your Section 8 Contract or need to increase your Section 8 rents, contact me by email, fax or by telephone.

PURPOSE: To estimate market rental rates for each type of unit in the property by comparison with unassisted units in the same market area that are similar to the property as to neighborhood (including risk of crime), type of location, access, street appeal, age, property size, apartment mix, physical configuration, property and unit amenities, utilities, and other relevant characteristics; by adjusting for differences between the subject and the comparables.

TIMING: The Rent Comparability Study must be submitted with the Owner’s request for a Section 8 contract renewal and must be prepared by or signed off by a state certified General Appraiser licensed in the state in which the subject is located. The Study must have been completed within 90 days prior to the submission of the contract renewal request. Studies older than 90 days will not be acceptable.

INSTRUCTIONS: Rent comparability surveys must be completed by a Certified General Appraiser, licensed and in good standing in the appropriate jurisdiction. In some cases, it may be appropriate for an associate to assist the appraiser in completion of the survey. If an associate conducts the study, that individual must work for the licensed certified appraiser company contracted by the owner. The relevant responsibilities with regard to this issue are outlined in the Conduct section of the Ethics Rule, the Competency Rule, and Standards 2-3 and 2-5 of USPAP.

The most direct reference is covered by Standard 2-5, which requires that any appraiser who signs a report prepared by another, including a non-licensed or uncertified assistant, accept full responsibility for the survey. Surveys completed by non-licensed assistants or associates must be completed under the direct supervision of the licensed appraiser. In no circumstance is it appropriate for the principle appraiser to merely sign a survey prepared by an assistant or associate without providing proper supervision.

 Back to top 

If a non-licensed associate contributes to completion of the survey, the associate’s contribution must be acknowledged and specific tasks performed by the assistant should be clearly stated. If both the assistant and the principal appraiser sign the report, the principal must accept full responsibility for all aspects of the appraisal process as evidenced by the contents of the report.

The appraiser will use Form HUD-92273, Attachment 19 (3/95), Estimates of Market rent by Comparison, to develop the market rents following the instructions found below. Each Form HUD-92273 must be signed and dated by the state certified General Appraiser taking responsibility for the report and must also include his/her state license number. Attached to the Form HUD 92273 must be the following: (1) a full narrative explanation for each adjustment on the form; (2) a full set of pictures of the subject and each comparable; (3) a list of the names and phone numbers of a contact person for each property; and (4) a detailed address for each property.

A separate form must be completed for each Section 8 unit type (i.e. 1 BR, 2 BR, etc.) and should contain five unassisted comparable properties, unless there is a shortage of good comparables in which case a minimum of three is recommended. The study should be completed on all of the Section 8 units in the project, regardless of when the contract or stage is expiring.

For example, consider a 100 unit project that has two stages, each consisting of 50 Section 8 units. One stage is expiring in February, 1999, and the other is expiring in June, 1999. The rent comparability study will be submitted in November (at least 90 days prior to expiration ) for the February 1999 renewal and include the units covered in both stages. The study will include all 100 units and the renewed contract will be for all 100 units. The second stage will be terminated when it is combined with the other units. The same thing will be done with multiple contracts for the same project.

Form HUD-92273 will provide the appraiser with a convenient, consistent and systematic means of analyzing Comparable Rental Units, measuring any differences, and arriving at estimates of market rents by comparison for the subject unit. Each of the items listed in the first column under "Characteristics" tends to affect the rents typical tenants in the subject’s competitive area would pay. However, not all of the listed characteristics will always have an appreciable effect all of the time. Local market conditions will dictate if, when, and how much of an affect any given item might exert. The appraiser shall reflect this effect, if any, in the analysis.

 Back to top 

The appraiser will relate each of the characteristics to the subject and the comparables used by making relevant entries in corresponding spaces in each of the respective columns under "data." These entries will serve to facilitate objective comparison of the subject unit characteristics with those of each of the comparables. Significant observable differences between the subject and the comparables shall be reflected by entering a dollar amount for each difference in the appropriate space under "Adjustments". The adjustments must be made in dollar amounts, reflecting local market differences between the subject and the comparable. If the subject is superior to the comparable, relative to a characteristic, enter the amount of the adjustment in the "plus" column for that comparable; if the subject is inferior, enter the amount of the adjustment in the minus column. If the comparable project is offering rental concessions or has a vacancy rate in excess of 7%, appropriate adjustments should be made.

In order to complete the estimate of market rent for each unit type the appraiser should enter in the appropriate space provided for each comparable the current monthly rent. He/she should then enter the difference between the total "plus" adjustments and the total "minus" adjustments. An adjustment should then be made to the current monthly rent for that unit as indicated by the net effect of the "adjustments" column. The appraiser then determines a correlated subject rent which he/she believes to be the single most defensible estimate which is within the range of value indicators derived from adjustment of the comparable rents. He/she then signs and dates the form and enters his/her license number and the state that issued the license.

 Back to top 

My Resume

References provided upon request