Presentation on theme: "Appraising Buildings ISU – Economics 364X Tim Janssen Appraiser Farm Credit Services of America."— Presentation transcript:
Appraising Buildings ISU – Economics 364X Tim Janssen Appraiser Farm Credit Services of America
Introductions Name Where youre from (city, county) Whether or not you grew up on a farm What kind of operation (grain, livestock, etc.)
Objectives Understanding the inspection process Types of data to be collected during the inspection process Ability to describe the physical characteristics of the improvements Ability to identify functional and external depreciation issues Identify factors used to estimate RCNs
Preparing for the Inspection Know what youre going to see before you go Have a list of questions before going out Assessors sheet Plans, specs, costs on newer construction Aerial Soil Map
Information to be Collected Building Description Assess Condition (Effective Age/Remaining Economic Life ) Size/Capacity Functional Depreciation Issues External Depreciation Issues
Dwellings Description Types - ranch, multi-story, log, manufactured vs. modular, contemporary Construction Materials Interior Features - bedrooms, bathrooms, kitchen built ins, basement finish, walk-out, fireplaces, floor coverings, quality, etc. HVAC System - forced hot air, geo-thermal Water Source - rural water or well Septic - tank and laterals or public sewer
Dwellings Size - Square Feet of Living Space Above Grade vs. Below Grade Use outside measurements Ceiling Height - must be at least 5 feet Porches/Decks - open, 3 season vs. 4 season room Bay Windows Basement Finish - not included in square feet calculation
Dwellings Functional Depreciation Issues Floor Plan and Design Garage – number of cars, attached, detached, built-in, basement Bathroom on second level Superadequate Features - pool, jet tub?, basketball court, theatre room?, quality or size above neighborhood standards, etc.
Dwellings External Depreciation Issues Locational Issues - next to livestock confinement buildings, gravel vs. paved road, distance to off-farm employment, etc. Contemporary Designs Superadequate for area or economic conditions Economic Considerations - unemployment rates, interest rates, etc.
Dwellings RCN Guidelines Varies greatly depending on size and design Basic ranch style: $ per square foot Multi story dwellings typically cost less per square foot Log and contemporary designs can cost significantly more on a per square foot basis
Machine Sheds and Shops Size - square feet based on outside dimensions Height to Eaves Features Construction - pole vs. wood frame, siding and roof materials Interior features - concrete floor, insulation, heat, interior wall finish, floor drains, etc. Door size and type - sliding, overhead, bi-fold Brand or Builder
Machine Sheds and Shops Functional and External Issues Eave height may limit size of machinery Dimensions may limit size of machinery Superadequacy Small acreage wouldnt need a high end shop
Machine Sheds and Shops RCN Guidelines - Machine Sheds 4000 SF or less: $ /sf SF or more: $ /sf. Height to eave: Concrete floor: $ /sf. Insulation: $ /sf. Basic electrical: $ /sf. Overhead doors: $ ,000/ea.
Machine Sheds and Shops RCN Guidelines - Shops 1600 SF or less: $ /sf ,000 SF or more: $ /sf. Height to eave: 16+/- Heaters: $ /sf. Radiant in-floor heat: $ /sf. Bathroom plumbing: $ /sf. Low cost office: $ /sf.
Grain Storage - Bins Size/Capacity Normally measured in bushels Diameter squared X height X Formula does not include peaking Features Dryer Aeration floor/fans Stirator Unloading auger Ladder
Grain Storage - Bins RCN Guidelines 10,000 to 20,000 bushels: $ /bushel 20,000 to 60,000 bushels: $ /bushel 60,000+ bushels: $ /bushel Drying bins: +$ /bushel for burners, controls, stirators, stiffeners, and spreaders
Grain Storage - Handling Grain Leg Bushels per hour Height Drops Dryers Bushels per hour
Hogs - Finishing Size/Capacity Building Size - measured in square feet or head Capacity /- square feet of usable pen space per head (doesnt include offices & alleys) Building Features and Designs Modern - double curtains, fully slatted, climate controlled, natural or tunnel ventilation Old Designs - open front, modified open front, Cargill finishers
Hogs - Finishing Condition Issues Economic Life: 25 years Finishing vs. Wean/Finishing Contracts Finishing: $28-36/pig space Wean/Finishing: $34-42/pig space Terms: 5-7 years but had been 10 years External Depreciation Issues Hog prices Availability of grower contracts
Hogs - Finishing RCN Guidelines Finishing: $ /pig space Wean/Finishing: $ /pig space Brooders/Feed Mats: $5-8/pig space Generators and compost facilities would add to cost Offices and showering facilities can add to cost
Hogs - Farrowing Size/Capacity Normally measured in # of sows 6.0 to 6.5 Sows per farrowing crate Gestation crates Holding pens Gilt development/isolation space
Hogs - Farrowing Functional Issues Adequate gestation space Adequate sow movement/holding space Adequate gilt isolation and development space Sow flow External Issues Feeder pig and market hog prices Environmental regulations, permitting, interest rates, etc.
Hogs - Farrowing RCN Guidelines $1200 to 2000 per sow Factors Affecting RCN Office facilities Developer facilities Gestation type - pen vs. crate
Hogs - Nursery Size/Capacity Measured in pig spaces square feet per head Functional Issues Separate site for bio-security External Issues Feeder and market hog prices, demand for feeder pigs, availability of contracts, etc.
Hogs - Nursery RCN Guidelines $150 to $200 per pig space $30 to $45 per square foot
Cattle – Feedlots & Confinements Size/Capacity Square feet per head Confinement 40 sf/head for solid floor 25 sf/head for slatted floors over pits Open lot 225 sf/head Bunk space per head Confinement: 10 per head Open lot: 12 per head
Cattle - Feedlots & Confinements RCN Guidelines Open Lot: $ /head Confinements: Solid Floor: $10-15/sf. or $ /head Slatted Floors & Pit: $21+/sf. or $1000+/head Other Considerations Add $ per head for feedmill, grain storage, commodity shed, processing building, etc. Capacity can be limited by permits and manure storage
Cattle - Feedlots & Confinements Functional Issues Bunk space vs. lot space Feed storage, mixing, and handling system Manure storage and handling system (settling basin) Receiving/working/shipping facilities External Issues Cattle prices Feed prices Environmental regulations
Poultry – Laying Hens Size/Capacity Stacked Cages: sq. in./bird (67 sq. in. per bird is fairly typical) Cage Free Construction and Design Hi-Rise vs. Stacked Egg Processing - packer, grader, breaker Manure Storage and Handling
Poultry – Laying Hens RCNs Pullet Barns: $10-12/bird Layer Barns: $15-20/bird for standard cage design Packing, breaking, and grading facilities can add significantly to the cost
Poultry – Laying Hens Functional Depreciation Issues Processing building and equipment right sized for the number of layers External Depreciation Issues Feed Costs Egg Prices Availability of Contracts Customer Preferences - cage-free vs. cages, liquid egg vs. table eggs, etc.
Poultry - Turkeys Size/Capacity Brooder: 0-5 lbs., sf/bird Finish Light Birds: lbs, sf./bird Finish Heavy Birds: lbs, 3.5+ sf/bird Construction and Design RCNs Brooders: $ /sf. Finishers: $ /sf.
Poultry - Turkeys Functional Depreciation Issues Brooder space vs. finish space Brooders turn every weeks vs. finishers turn every weeks Brooding and finishing on same site External Depreciation Issues Long-term grower contract available? Location to nearest packing plant Location relative to neighboring buildings and livestock facilities (bio-security)
Other Considerations Some buildings dont contribute any significant value (corn cribs, old barns, etc.) Permits Wind Turbines Underground Storage Tanks Bio-security issues relating to location of livestock facilities
Objectives Reviewed Understanding the inspection process Types of data to be collected during the inspection process Ability to describe the physical characteristics of the improvements Ability to identify functional and external depreciation issues Identify factors used to estimate RCNs
Conclusions and Wrap Up Questions regarding inspections Questions regarding appraisal profession Appraiser Gift Bag