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Golden Appraisal Services, LLC - Partial Interest Valuations
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Partial Interest Valuation Often, the ownership of a property
isn't cut and dried. Bill Jones might own a
property outright, by himself, unencumbered by liens
or mortgages, leases or easements. But he might also
own it as a "joint tenant" with his wife,
Mrs. Jones. The Jones' may lease some of the property
to another party. They may have signed an agreement to
give up any subsurface or mineral rights they have in
the property in exchange for cash. There may be a
restriction in the Jones' deed stipulating that the
property must never contain a structure more than two
stories in height. There are a thousand other ways the
100 percent "bundle" of rights to a parcel
of property might be distributed. Anything less than full ownership
-- called "fee simple" in deeds and
conveyances -- by a single person or entity is a
"partial interest."
Here at
Golden Appraisal Services, Inc., we appraise partial interests all the time. It's a
specialty and discipline that takes unique expertise
and training, and you can be assured we're well
qualified to deliver an opinion of value on a partial
interest. When
might you need a partial interest valuation? In divorce or disillusionment of a
partnership proceeding, you might need to fairly
value one party's interest in real property.
Sometimes, particularly in partnership situations,
it's not simply a matter of appraising the entire
property and dividing by the number of owners. A
fractional share of property may sell at a discount to
reflect lack of control, costs of and barriers to
sale. You need the judgment of a professional
appraiser. You might need the value of rents or
leases on a property, but not the underlying value
of the real estate. This is more complicated than it
sounds, and isn't just a matter of how much a tenant
is currently paying. A professional, well trained
appraiser will examine rents in the market to
determine fair market value of rents or leases. If a
tenant is paying below market value, they might
be able to sublet at a profit. If they're paying
over market value, their likelihood of moving on
when the lease term is up increases. There are many
things requiring the professional judgment of an
appraiser that factor into the calculation. You might need to know the value of a
proposed or existing easement.
An easement is a right to use property, without
owning it. How much is it worth to your neighbor to
build a driveway across part of your property for
entry to and exit from his property, rather than an
alternate route that may be more costly to build? You
might need an appraisal of your (or your
customer's) interest in a timeshare or condominium.
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