Rental Properties

All three (3) approaches to value are valid when dealing with income producing properties, Sales Comparison Approach, Cost Approach, and the Income Approach.  For rental properties which are not owner occupied, meaning they do not have a homestead exemption, a Gross Rent Multiplier may be used to determine valuation.  The Gross Rent Multiplier represents the relationship between the gross rents generated by a rental property and the sales price, or market value.  

The formula for this is :  Sales Price / Rent = Gross Rent Multiplier (GRM)

                                                            Rent * GRM = Assessed Value

The rent for the above equation is annual rent.

If the taxpayer would like to have the income capitalization method or the gross rent multiplier method used to develop an assessment of the taxpayer's property, the taxpayer must submit rental information along with a copy of applicable leases/Schedule E's to the assessor not later than January 1st of the assessment year.