Posted by Paul Ness, MAI on October 30, 2003 at 06:47:13:
For a duplex, traditional income capitalization as you described it, is not typically done on such small 2-unit properties. It would be tough to get an idea of a cap rate for such a property from an appraiser. Comparable sales data would be most helpful, which is best obtained from either a broker or appraiser. With sale data, unit value indicators are calculated such as price per room, price per sq. ft. and gross rent multiplier. These can then be applied to the subject’s information. The cheapest route (if you don’t want or need an actual appraisal for financing) would be to pay a broker for an opinion of value letter.