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- Title
Understanding and Appraising Properties with Accessory Dwelling Units.
- Authors
John Brown, Martin; Watkins, Taylor
- Abstract
Accessory dwelling units (ADUs) are promoted by some municipalities for social and environmental reasons. However, appraisals of and lending on properties featuring ADUs can be complicated by inaccurate perceptions of these dwellings and certain institutional policies. This article provides a primer on ADUs and tests an income-based approach to valuation. For 14 properties with ADUs in Portland, Oregon, an income capitalization approach yielded valuations significantly higher than actual sale prices, by 7.2% or 9.8% on average, depending on the formula used. ADUs also contributed on average 25% or 34% of each property's appraised value, depending on the formula used. Valuation by income can Increase appraiser insight as ADUs become common.
- Publication
Appraisal Journal, 2012, Vol 80, Issue 4, p297
- ISSN
0003-7087
- Publication type
Academic Journal