In recent weeks, commercial property owners received a letter and form in the mail requesting rental and expense information regarding the property in order to help with Archuleta’s County’s 2013 reappraisal.
If that form seemed odd or new to any who received it, it is.
The letter is the first of its kind to be mailed out in Archuleta County, according to Assessor Natalie Woodruff.
The solicitation of information, Woodruff said, will help to provide more information to the county in pursuit of an accurate appraisal.
The rental income and expenses for the appraisal period are plugged into specific formulas and vacancy rates are subtracted out in order to determine a property’s value via an income approach.
Assessments for commercial property must consider three approaches to help determine an accurate appraisal value: market value, income and cost approaches. Housing, in contrast, is appraised solely on market value
But, the three approaches can sometimes prove difficult, Woodruff explained, either depending on sales of commercial property or, in the case of the cost approach, hampered by things such as historic districts, such as in downtown Pagosa Springs.
For example, if a building has to be replaced, it would likely come at a higher cost than to simply replace the building for a particular use.
In the case of factors that may skew one or more approaches, the most appropriate approach is determined and used.
Traditionally, income approach data for Archuleta County has been extrapolated from statewide statistical data, with data taken relating to similar communities with a similar vacancy rate (8-12 percent).
This year’s request for local data will help to verify the accuracy of the statewide data, Woodruff said, adding that she does not expect much of a variation from that data.
The commercial appraisal information for the appraisal period, which ended June 30, is being collected by Value West, a company that includes appraisers John Zimmerman and Judy Call, Woodruff said.
Woodruff said that, while, theoretically, the county could ask for the information again during every reappraisal, commercial property owners will likely not receive the form again if they are owner-operators (unless there is a change in use).
Reappraisals occur in odd years, with the current reappraisal work for the 2013 appraisal.