Income And For further information please contact Operating Expenses Only income and operating expenses Saskatchewan Assessment Management Agency necessary to operate a multi-residential Saskatchewan Assessment Management Agency are used for the Income Approach. Revaluation Unit 306-924-6626 or 866-828-2133 Multi- Income or expenses associated with any www.sama.sk.ca other business conducted on the Residential property are not relevant or used to or value the property itself. City of Regina 306-777-7240 Confidentiality of www.regina.ca Property Assessment Information City of Saskatoon through the Income 306-975-3227 Approach The assessment jurisdiction recognizes www.saskatoon.ca information required may be personal, confidential or sensitive. Steps have City of Prince Albert been taken to ensure information is kept 306-953-4320 secure and confidential in accordance www.citypa.com with confidentiality provisions in City of Swift Current legislation. 306-778-2777 City of North Battleford When will the Income 306-445-1781 Approach be implemented in Saskatchewan? The Income Approach will be used for the 2009 revaluation. The time until then Market Value is needed to: ● organize and carry out research ● gather physical, income and expense data on properties ● recruit and educate appraisers = Net Operatin ● ready computer systems to store, analyze and determine values. Income Overall Cap

Overall Multi-Residential Sales Comparison Approach How the Income buildings sell with some degree Properties of regularity. However, there are many types Approach Works Multi-residential properties contain many of and it may not be possible to The Income Approach aims to obtain dwelling units, each with its own set of obtain enough sales for them in every values for a range of multi-residential rooms. Multi-residential includes assessment valuation period, e.g.: older, dwellings with typical features and duplexes, walk-up apartments, and luxury, walk-up apartments, or luxury high-rises. If conditions. The income approach high-rise apartment complexes. the sale information is present and method used in Saskatchewan for applicable, the sales comparison approach multi-residential dwellings employs two may be considered. If the sales information variations of direct capitalization Multi-Residential is not sufficient, other approaches to value Properties as method: will have to be considered. ● Capitalization of Net Operating Investments Income (NOI), and Income Approach Multi-residential properties return revenues The Income Approach valuation method is ● Gross Income Multiplier (GIM). in the form of rents to their owners. These used widely throughout North America when properties are typically purchased for appraising income-producing properties Both methods rely on the same investment purposes, and their ability to such as multi-residential buildings. principles. earn income is fundamental to their market value. Other income factors include The Income Approach can be applied to Direct capitalization converts or demands for space, economic conditions, multiple residential buildings or apartments, capitalizes the estimated current net and operational risks. fourplexes, rental , and operating income (NOI) to produce an townhouses. In Saskatchewan, only multiple estimate of current value. The formula Analysis of Valuation residential buildings and apartments of four is: or more units are expected to be valued Approaches to Multi- Net Operating Income (NOI) with the Income Approach. Value = Residential Properties. Overall Capitalization Rate (OCR) The Income Approach is one of three Multi-residential rental information is methods appraisers use to estimate a multi- generally available for all types of apartment A gross rent multiplier (GRM) relates residential property’s assessed value. properties, especially for smaller properties. value to the gross income produced by These are the: Income and expense statements and other a property: ● Cost Approach financial information may be more difficult to Gross Rent obtain. Gross Annual Income ● Sales Comparison Approach Multiplier (GRM) = Sale Price ● Income Approach With the appropriate financial information it is possible to establish the rates needed to The higher the similarity in comparable Cost Approach complete a direct valuation on certain larger properties, and the more plentiful the The cost approach estimates the multi-residential properties. sales data, the more accurate the replacement cost of a building, less results of a GRM valuation. depreciation, adding land values primarily The income approach works well for mass based on sales. The approach is most appraisals because multi-residential GRMs are expected to be used on less useful when there are few comparable properties are bought, sold, and developed complex and smaller types of sales. The cost approach is valid and will on the basis of expected income. Since the apartment buildings because rental continue to be used in smaller municipalities Income Approach relies upon the information is typically available for and for specific property types across information generated from market sales these types of properties. Saskatchewan. data, all such data must be investigated and recorded.