How Landlords Can Get Maximum Value From A Rental Property Appraisal

A rental property appraisal will tell you exactly how much the property is worth to the average buyer or investor in the current market.

In part one of this article, we talked about why rental property owners need an appraisal, how much an appraisal typically costs, and what the appraiser looks for when they’re on your property.

In part two, we'll talk about how to handle a tenant who won't cooperate with an appraisal (due to coronavirus or some other reason). We'll also drop some helpful hints for landlords who want to get the maximum appraisal value for their property.

Let's get started!

Can a Tenant Reject an Appraisal?

What should you do if the tenant won’t let an appraiser inspect the property?

If the tenant refuses to let an appraiser come in and look at the property, review the lease agreement with them. Typically the lease agreement has a section specifically on what to do about this, but usually you only need to give the tenant 24 hours notice before you send in an appraiser. In that case, all you have to do is send them a “notice of intent to enter” and you’re all good.

Given that there’s currently a pandemic, though, you might not want to force outside contact on an at-risk tenant. You don’t want to create an unsafe scenario for either the tenant or the appraiser, and forcing contact without a lease provision and reasonable notice is begging for legal trouble.

Tell your lender about the scenario, and they’ll work out possible solutions with you. As we’ve mentioned before, there are appraisal options for some loan types that are exterior-only.

How to Get Maximum Value for Your Rental Property Appraisal: 4 Tips To Remember

And, finally, the section that could possibly help your bottom line the most: How do you get the highest possible appraisal for your property? Is there anything you can say or do that’s actually going to help the value? Or is it all out of your hands?

Here are our four best tips, in order from most-impactful to least-impactful on the value:

Provide the appraiser with a list of improvements

This is the biggest one. It’s not immediately clear to the naked eye where and when any improvements have taken place—particularly if the house is a bit of a mess, which we’ll talk about soon—but if the bathroom, kitchen, and roof have all been replaced in the past five years, you can expect that to seriously help your value.

On the other hand, if the appraiser doesn’t have any information on improvements, they might miss a couple, which could lower the quality and condition of your house, forcing the appraiser to pull up comparable sales that don’t reflect the renovations or remodels.

Fix up anything that’s in serious need of fixing up

If you’re working with a “well-lived-in” property, make sure that there aren’t any glaring maintenance issues. Again, you can use your common sense here: if you think it would bother a typical buyer, it’s probably something that the appraiser is going to note in the 1004.

Keep the property clean on the inside and out

The appraiser doesn’t care about whether or not there’s clutter around the house, and they don’t care about interior design. They likely see hundreds, if not thousands, of houses per year, so nothing is really all that surprising. However, if you want the best possible appraisal, you want to create the best possible environment for the appraiser. For the best possible appraisal, pretend you’re staging an open house.

Be on time to let the appraiser in to the property, and be respectful

This one should be a no-brainer, but do your best to be kind and respectful to the appraiser. This person, after all, is in charge of determining the value of your property, and oftentimes it can make or break your deal. If the appraiser knows that you need an appraisal completed by Thursday in order for a loan to clear, but you showed up 45 minutes late to the inspection, they might prioritize some other reports before finishing yours. If, on the other hand, you’re professional, helpful, and kind, they’re going to do everything they can to help you out.

Conclusion: Handling Appraisals the Right Way

In conclusion, let’s summarize all of the topics we listed in the beginning:

Why do you need an appraisal?

You need a rental property appraisal because 1) interest rates are incredibly low and it’s going to help your bottom line, and 2) it’s required by most major lenders, as well as the federal government.

How much does an appraisal cost?

The typical appraisal is going to cost anywhere from $300-500, but a good rule of thumb is about $400.

What do appraisers look for when they look at your property?

The floor plan (including overall square footage), building materials and surfaces, and the quality and condition.

What do you do if the tenant refuses the appraisal?

Review the lease agreement with your tenant. There’s typically a section about this exact situation. If they’re an at-risk member of the population during the pandemic, then review options with your lender.

How do you get the maximum value for your property?

Provide the appraiser with a list of improvements in as much detail as possible, fix up anything inside or outside the house that’s in dire need of fixing up, keep the property reasonably clean, and be kind and respectful during the appraisal.

Which Housing Markets Are Most Vulnerable To Coronavirus Impact?

A recent analysis of housing markets all over the country has shown that more than half of the 50 housing markets most vulnerable to collapse due to the coronavirus pandemic are centered in the Northeast and Florida. 

The largest northeastern cluster is in New Jersey and includes 14 of their 21 counties, including five in the New York City suburbs, with four surrounding counties in New York state and three in Connecticut. Another 10 were in Florida, but the only west coast area at risk was a single county in California.

A few of their findings:



These findings correlate with previous predictions for good cash flow markets being largely found in Texas and the Midwest.

ATTOM Data Solutions came to these conclusions after analyzing risk based on the number of foreclosure notices received in Q4 2019, the percentage of homes underwater in Q4 2019 and the percentage of local wages needed to pay the expenses associated with home ownership. Using a sample size of 483 counties who reported the data, they then ranked the counties from lowest to highest in each category and combined those rankings.

“It’s too early to tell how much effect the xoronavirus fallout will have on different housing markets around the country. But the impact is likely to be significant from region to region and county to county,” said Todd Teta, chief product officer with ATTOM Data Solutions. 

“What we’ve done is spotlight areas that appear to be more or less at risk based on several important factors. From that analysis, it looks like the Northeast is more at risk than other areas. As we head into the home buying season, the next few months will reveal how severe the impact will be.”

Real Estate Markets & Coronavirus: Construction & Home Buying In a Post-Pandemic World

It’s not an exaggeration to say that nearly everything has changed in the past month due to the coronavirus—and real estate markets are no exception. Almost every single sector of the economy is facing unprecedented challenges, but especially the construction industry.

Starting with supply chain interruptions from China when that country was facing the worst of the pandemic, there have been slowdowns at nearly every turn. Now that the US is dealing with the virus, projects are taking longer and longer to complete as appraisers and inspectors can’t get into homes while families shelter in place there. While this isn’t their fault, many homebuilders feel completely at a loss.

“We’re reacting to news and dealing with it accordingly,” says Joe Fowler, president of the Home Builders Association of Greater Austin. “This is so fluid and things keep changing based on whatever is happening on any given day.”

Ripple Effect Hits US Real Estate Markets

A significant percentage of building materials, estimated at 30% by Richard Branch, chief economist for Dodge Data & Analytics, is exported from China. These exports can be everything from copper and steel to cabinetry and fixtures. With factories in China closed or at reduced capacity in response to the virus, production slowed or even halted entirely. The impact of this was delayed for American homebuilders, but we are finally feeling the effects of this. Toll Brothers, one of the country’s largest homebuilders, recently announced that shortages of lighting fixtures and small appliances will delay the sale of some of their new homes in California. While some builders have been able to find alternative suppliers here at home, it hasn’t been easy.

“In construction, everything comes down to time and money. With the coronavirus, we don’t know how big it’s going to be, how long it will last, and what its full impact is going to be,” says attorney Steve Lesser, a past chairman of the American Bar Association’s Forum on Construction Law. 

Economic Uncertainty Makes Home Buyers Timid

In January of this year, Fannie Mae economists forecasted a stellar 2020 for the housing industry. Thanks to low unemployment, solid wage growth and low mortgage rates, housing starts were predicted to jump from 1% per year to 10% in 2020, which would have made it one of the best years since the last housing boom in 2007. Now, with unemployment at record levels and climbing daily combined with unstable financial markets, buyers and commercial developers have all but disappeared.

Home builders are still building new homes, though sales centers and Realtors with open houses are seeing a marked drop in foot traffic -- likely due to both social distancing and economic insecurity. Similarly, online real estate portals like Zillow and RedFin have seen a significant drop in both web traffic and new listings since the outbreak began in the States.

The National Association of Realtors released a survey that found nearly half of agents agreed that home buying interest had declined due to COVID-19. Home buyers who are still actively seeking to purchase are opting to minimize risk with virtual home tours or having their Realtor give them a video chat walkthrough.

Construction Delays Lead to Unanswerable Questions


Even for buyers ready to make a purchase, the process is unavoidably delayed by things out of anyone’s control. Appraisers and home inspectors aren’t able to do their jobs as long as the current homeowner is sheltering in place there. Planning and zoning departments are taking longer to approve permits due to limited access to historical records and blueprints while they work from home. These backups can cause delays for lenders, who are already facing a tidal wave of refinance applications as well. This chain of setbacks can leave homeowners, home buyers and Realtors scrutinizing their contracts and insurance policies to see who may be liable for increased costs or delays.

“There are many terms that will be relevant to those discussions, including the various contractual terms relating to the contractor’s schedules, substantial completion, delays, liquidated damages and other contractual provisions,” said Michael Keester, a partner at law firm Hall Estill in Tulsa, OK.

How Does This Affect Real Estate Investors?

There’s a glimmer of hope in all of this if you’re an investor. As many learned after 2008, an economic downturn or recession is fertile ground for investment real estate. Because of forbearances and temporary forgiveness, it may be a few months before foreclosures hit the market en masse, but there are still sellers who need to sell now. Due to the current economic climate and the increasing lack of demand, the market will likely quickly become a buyer’s market.

Between that and current financing rates at record lows, now is a great time to form your Series LLC and buy because while the home buying market may fall, experts say the outlook for the home rental market looks good. Landlords who can provide single family housing with a yard or the ability to accommodate multiple family members working from home will be a very valuable thing in the coming months. Epidemiologists say we may be facing up to 18 months of varying levels of social distancing, so renters will be looking for housing that can make this new normal more viable.