Multi-Residential Property Assessments

Multi-residential properties may have different designs, the defining feature is that they contain seven or more self-contained residential units. MPAC stratifies multi-residential buildings into four building types:

• Bachelorettes are usually found in converted homes and are usually only large enough to have a bedroom and bathroom or bedroom and kitchen.
• Row housing lines the street, similar to townhomes, and the entire complex is under a single ownership.
• Low-rise apartment buildings have less than five storeys. 
• High-rise apartment buildings have five storeys or more.

To be considered a self-contained unit, each unit must include a kitchen, a bathroom and a separate entrance.

Assessment approach

We use the income approach to value multi-residential properties. This approach reviews the potential rental income and other potential income that could be generated by the property (e.g. parking, laundry). We complete market analyses to determine an allowance for vacancy and collection loss (bad debt), normalized operating expenses, and capitalization rates. 

Steps to assess value

1. We look at a number of factors that affect your property's marketability, and establish your property's potential gross income based on Fair Market Rent of similar properties.
2. We then deduct an allowance for vacancy and collection loss, which gives us the property's effective gross income.
3. Next, we deduct normalized operating expenses, which gives us the property's net operating income.
4. We then divide the net operating income by a capitalization rate determined by the market, which gives us the property's assessed value.