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Irrigation Guy
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# Posted: 5 Mar 2021 11:21am
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I am going through the process of refinancing my house to take advantage of super low rates 2.65%! The mortgage guy was asking about assets and such, I said I have 8 acres with a cabin. He wanted to know what I thought it was worth and I didn’t really have an answer so I guessed. It got me thinking how are these non traditional property’s valued? Land value alone? I suppose if you had a buyer with cash that loved your cabin it might fetch more but I am not sure.
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paulz
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# Posted: 5 Mar 2021 11:42am
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I would think permitting and legality of any structures would have a large affect on value. Depending on location..
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jhp
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# Posted: 5 Mar 2021 11:50am
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A realtor or a bank will look for "comps" which are comparable property sales that have similar features. Same rough area, same lot size, same cabin type.
You can always get on Zillow and see recent sales in your area.
Beyond that there is a lot of wizardry and finger-in-the-air math people use to arrive at values. In the end, it's worth what the next guy will pay you for it.
If you want a rough value, generally you can figure out what a comparable per-acre cost is in your area based on previous sales. Any lot improvements like electric, septic, driveway, are worth what you paid because the next guy would have to do it as well. Any structures, like paulz said are highly variable. Anything you built yourself, unless you are a home builder isn't really worth anything.
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Houska
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# Posted: 5 Mar 2021 12:08pm - Edited by: Houska
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Here's how we approached figuring out what might be a "justifiable price" when we were looking and buying 3 years ago. Of course, then it depended how much we wanted the place, but it was a way to figure out when asking prices were very inflated
1. Land value, based on comparables (per acre or per ha) with similar land type and zoning. This includes access issues (is it on a public road? established ROW?), e.g. "20 acres of landlocked hunting land at $800/acres zoned R, plus 10 acres of mature forest with road access at $1200/acre, zero for the protected EP-1 wetland, for a total of $28,000."
2. "Cottage land premium", which can be a high $ per ft/m of prime lake frontage, depends on distance to local urban areas. "Add $75-150/ft for the 300' of lakefront on Lake Beautiful, use the low $ figure since a lot of it is weedy, so call it $22000"
3. Adjustment for (land) improvements or known deficiencies, based on today's cost. E.g. "there's a good driveway built that would cost $15k" and "it will need a survey and application for consent to register the easement, which will cost about $8k".
4. For legal structures, built to code and in good repair, value at approximate cost to replace, e.g. "An Amish shed that size would cost $14k (even though it's an owner built sleep cabin)". If not legal or in poor shape, value at zero up to a max of the estimate of the value of materials, e.g. "there's about $2000 of lumber in the bunkie".
For a good quality, second/seasonal residence type of structure, you might go quite high, e.g. "You'd probably pay $180/sq ft for that quality of construction, so at 480 sq ft thats $85-90k", but that's if it was really built to that standard, by people who knew what they were doing!
5. Adjustment for built improvements or deficiencies, e.g. "that well cost $8-10k" vs "that septic will need $10-12k of work".
6. Throw 4. and 5. out the window where the value is in grandfathered nonconforming structures, e.g. "that cabin is crap but it can be rebuilt on that footprint, which is closer to the lake than would ever be allowed these days."
Then you add all of it together, and apply all sorts of fudge factors if you don't like the outcome 
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snobdds
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# Posted: 5 Mar 2021 12:51pm
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Real estate agents price the market, not necessarily the house or land. It's always amazing to me assessors fall right in line to the real estate agents assessment.  No collusion there.
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Brettny
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# Posted: 5 Mar 2021 01:01pm
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Theres really no point in adding a dollar figure to this thread as even the next town over could be totally different. The only thing you can really go on is comps.
But I can tell you that while looking for land or a cabin on land theres a whole lot of crappy built shacks filled with road finds that people want a whole lot of money for. This is why we ended up buying just land, not even a driveway as they wanted a whole lot of money for that too.
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Houska
Member
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# Posted: 5 Mar 2021 02:40pm - Edited by: Houska
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Quoting: Brettny But I can tell you that while looking for land or a cabin on land theres a whole lot of crappy built shacks filled with road finds that people want a whole lot of money for.
And in these COVID times, they may well get it. At least here in Canada, as people come to realize social distancing, periodic business closures, and limitations on travel are likely to continue until at least this fall, any cottages, cabins, or recreational land suitable for camping on the market are moving pretty quickly, and at pretty high prices.
If we hadn't bought a couple years ago, we'd wait it out and wait for some of those purchasers to discover that the romance gets disrupted by black flies, gravel road washouts, smelly outhouses, etc.
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Brettny
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# Posted: 5 Mar 2021 07:38pm
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They where getting it pre covid in NY. Theres only so much land that's near a highway that comes from NYC and is within a reasonable driving distance.
Even a tent site 40min drove from here is going for $100 a night. The guys prob paying his homes mortgage on summer tent sight fees.
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gcrank1
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# Posted: 5 Mar 2021 08:33pm
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You start with the assessment and what you are paying taxes on and go up from there to whatever the market will bear. It isnt always worth more to you than somebody else.
It looks like demand is high right now and with lumber up you need to calc the replacement costs of the 'improvement(s)', NOT what you paid to build it.
Price as if you were building today.
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Irrigation Guy
Member
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# Posted: 5 Mar 2021 09:05pm
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To be clear I am not selling. My refi made me start thinking about the topic but I thought it would be an interesting topic to discuss. My cabin is quasi legal but would not qualify for traditional financing.
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gcrank1
Member
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# Posted: 5 Mar 2021 10:22pm
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Imo, even if not selling the 'valuation' at any given time has the same criteria, just like with vintage cars, motorcycles or whatever, an estimation of what the market will bear. If you are in a demand market the value, even if you are currently 'sitting on it', does not stay stagnant. Miss the market timing and you may lose your window of opportunity.
Btw, in business it is common to inflate the valuations of 'assets' for loan enhancement. To prove the est of value requires the actual sale. The appraisal/assessment is just a judgement call at one place in time, and some are better at it than others.
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Aklogcabin
Member
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# Posted: 6 Mar 2021 10:41am
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Priceless
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CabinBuilder
Admin
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# Posted: 8 Mar 2021 01:58pm
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There should be an assessed value stated in your cabin property tax bill - this is your starting point. Add from there, based on market price of similar properties in your area.
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paulz
Member
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# Posted: 8 Mar 2021 03:45pm
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A former neighbor 1/2 mile down the road from me bought 5 acres on a southern exposure with an unpermitted, off grid cabin for $600K about 3 years ago (I'm in the high rent district but I got my crappier land during the '08 tumble, for a lot lot less). He somehow got it permitted, added a Yurt, a big solar trailer/generator/inverter combo, graveled the driveway, remodeled the cabin etc.. According to him his wife didn't like it (I think maybe it was planned all along..). He put some bucks into it but it sold last fall for $1.2M.
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Irrigation Guy
Member
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# Posted: 8 Mar 2021 04:35pm
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Quoting: paulz A former neighbor 1/2 mile down the road from me bought 5 acres on a southern exposure with an unpermitted, off grid cabin for $600K about 3 years ago (I'm in the high rent district but I got my crappier land during the '08 tumble, for a lot lot less). He somehow got it permitted, added a Yurt, a big solar trailer/generator/inverter combo, graveled the driveway, remodeled the cabin etc.. According to him his wife didn't like it (I think maybe it was planned all along..). He put some bucks into it but it sold last fall for $1.2M.
Wow! Where are you?
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paulz
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# Posted: 8 Mar 2021 04:55pm
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Northern California coast. Rumor has it a lot of people are leaving the SF Bay Area for a few reasons, Covid being one, and taking their big fat hi tech wallets with them.
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Irrigation Guy
Member
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# Posted: 8 Mar 2021 05:46pm
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Quoting: paulz Northern California coast. Rumor has it a lot of people are leaving the SF Bay Area for a few reasons, Covid being one, and taking their big fat hi tech wallets with them.
Those prices are nipping at the heels of the houses here on Long Island
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beachman
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# Posted: 10 Mar 2021 11:15am
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IMHO - don't value it past assessment value if you don't need it for financing. If you do not need it at all, don't list it. Property tax guys might be sniffing for more taxable value.
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RiverCabin
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# Posted: 10 Mar 2021 11:37am
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Whoah, everyone else is missing the elephant in the room. DO NOT let the bank tie up your cabin in your home mortgage loan. WATCH OUT that when you close that they will include that in your deed of trust without your knowledge.
I own multiple pieces of property including my cabin. Last time I refinanced my farm, the bank "conveniently" included property descriptions of contiguous properties I had purchased for cash. I told them they were wrong and I walked out of the closing. The bank blamed the title company and the title company blamed the bank. Three days later I closed with only the correct description.
Times are strange. It doesn't hurt to have a second unencumbered home if things get tough.
Valuing most cabins, especially off grid cabins, is hard. As others have said, look for comps and especially raw land comps if you have an unapproved cabin. Cabin prices are getting stupid everywhere it seems with the Covid. Here in Missouri I just saw three acres in the middle of nowhere with a deeded easement to a river for 60k. That's three acres with absolutely nothing on it and no actual river frontage. I'm not going to lie, it made me ponder what I could get for my on grid cabin directly on the water.
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Irrigation Guy
Member
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# Posted: 10 Mar 2021 04:34pm
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Quoting: RiverCabin Whoah, everyone else is missing the elephant in the room. DO NOT let the bank tie up your cabin in your home mortgage loan. WATCH OUT that when you close that they will include that in your deed of trust without your knowledge.
Mortgage guy assures me that nothing is tying the two properties together, but I will be sure to look out for it at the closing. These mortgage guys are kind of like used car salesmen though. Thanks for the heads up.
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