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HUD Rent Comparability Studies

HUD Rent Comparability Studies

HUD rent comparability studies are used to determine rent for Section 8 apartment units and in conjunction with the HUD "Mark to Market" program.

Requirements for preparing HUD Rent Comparability studies are voluminous and strict.  HUD Rent Comparability Studies require adjustments for a large number of factors including:

  • Number of bathrooms;
  • Number of bedrooms;
  • Square feet;
  • Year built; The age of the property can certainly impact the level of rental rates. An apartment complex built in 1970 we generally command lower rents than an apartment complex built in 2000. However, the apartment complex built in 2000 is not likely comparable to the apartment complex built in 1970. The condition of the property is typically more important than the year built.
  • Condition;
  • Appliances;
  • Amenities. Amenities include both those within the unit and in the common areas. The marginal rent generated by an amenity is not necessarily related to the cost of the amenity. Washer-dryer connections generate a substantial premium at many properties relative to the cost of installing washer-dryer connections when building the property. Apartment investors and managers regularly review the amenities and search for options to increase rent.

HUD Rent Comparability Studies include a detailed spreadsheet for each floor plan in the apartment complex.  When estimating market rent for most apartment complexes the appraiser or market analyst has the benefit of considering both rent comparables and recent arm's length leases at the subject property.  However, since there are no arm's length lease transactions at many apartment complexes with HUD residents, the appraiser is limited to considering data for the rent comparables (adjusted to the subject property).  Having this data available (i.e. no arm's length leases at the subject property) adds to the challenge of preparing HUD Rent Comparable Studies.  (Appraisers have an idiom that the best comparable is the subject.)

O'Connor & Associates has prepared hundreds of HUD Rent Comparability Studies, in addition to hundreds of HUD MAP market studies and appraisals and HUD Mark to Market appraisals. Amenities include both those within the unit and in the common areas. The marginal rent generated by an amenity is not necessarily related to the cost of the amenity. Washer-dryer connections generate a substantial premium at many properties relative to the cost of installing washer-dryer connections when building the property. Apartment investors and managers regularly review the amenities and search for options to increase rent.

O'Connor & Associates is the largest independent appraisal firm in the southwestern US and has over 40 full-time staff members engaged full-time in valuation and market study assignments.  Their expertise includes HUD rent comparability studies, HUD MAP market studies and appraisals, HUD Mark to Market appraisals, feasibility studies, valuing real estate, business personal property, business enterprise value, purchase price allocation for businesses, valuation for property tax assignments, partial interest valuation, estate tax valuation, expert witness testimony and valuation for condemnation.  They have performed hundreds of HUD rent comparability studies.

To obtain a quote or further information for a HUD rent comparability study, contact either George Thomas or Craig Young at 713.686.9955 or fill out our online form.



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