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INCOME AND EXPENSE PROCESS

INCOME AND EXPENSE PROCESS

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INCOME AND EXPENSE PROCESS

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  1. INCOME AND EXPENSE PROCESS Presented by Michael Tarello, MAI, ASA Vision Appraisal Technology & James McCathern, CEO Patriot Properties May 21, 2008

  2. INCOME AND EXPENSE PROCEDURES • Income and Expense Management • Data Entry of Income and Expense Forms • Analysis of Actual Income, Expenses, Vacancies and Capitalization Rates • Develop Market Rates • Reconciliation Process

  3. INCOME AND EXPENSE MANAGEMENT • Mail Forms Out by First of February • Types of Forms • DOR Suggested Forms • Vendor Form • Town Created Forms • General Form, Specialized Form or a Combination of Both • Use Forms that meets Towns Requirements and Gives the best fit to the CAMA product being Utilized

  4. INCOME AND EXPENSE MANAGEMENT • When do you Have Enough Supporting Data • Second Mailer to Specific Properties • Gather I/E Info from Neighboring Towns • Specialized Properties • Nursing Home Forms, Hotel/Motel Financials, Cell Tower Leases, Mobile Home Park Rents

  5. DATA ENTRY OF I & E FORMS • Sort Through Usable and Owner Occupied • Organize by Property Type • Same Thought Process • Do’s and Don’ts • Determine Type of Lease • Expense Ratios

  6. ANALYSIS OF ACTUAL INCOME • Categorize Income & Expense Data by Use (Office, Retail etc…) • New Leases To Old Leases or Step Ups • Identify Outliers for Rental Rates, Expense Ratios and Vacancy Rates • Determine Location and Utility Adjustments for each Properties Rental Rate

  7. SET MARKET RATES • Using Actual Income and Expense Data to Set Standard Rates Per Use • Creating Rental Parameters Based on Size or a Set Unit • Determining Adjustments from the Market for Various Elements that Effect Value • These Elements are Location, Utility, Quality of Expense Ratios, Vacancy Rates and Risk Factors of Cap Rates • Sample Reports, Actual Data and Market Rent Schedules

  8. RECONCILIATION PROCESS • Create an Income/Cost Report by Use • Reconcile the Properties by Use to Ensure Equitable Values Per Unit of Comparison, based on Location and Utility • Once Complete, Review Values Looking for Outliers • Rely on the Old to New Report and the Value per SF Spread Sheet Sorted by Use