Income Valuation

The Montgomery County Assessor of Property is undertaking a campaign to collect Income and Expense information to develop a database that can be used for the accurate analysis of Income producing properties. The Assessor recognizes that the Investment marketplace represents a significant portion of the Commercial and Industrial market in Montgomery County and is committed to enhancing and improving the valuation process for these types of properties.

All information provided to our Office will be treated with the strictest confidentiality. It is a violation of T.C.A. 67-5-401 for the Assessor to share the data with anyone outside the Office. This information will be used to establish the range of operational characteristics and criteria prevalent in the local market. The data will be analyzed to determine Median Market Indicators for such things as Rents, Misc. Income, Vacancy Rates, Collection Losses, Expense Ratios, Capitalization Rates, and lease terms.

By providing the requested information you will be assisting the Assessor in developing more accurate appraisals that are truly reflective of our local market rents. Once the information is analyzed and the Market criteria are established, all properties that returned information will be appraised using both “Cost Approach” and the “Income Approach.”  Whichever method yields the lowest valuation will be used to assess your property for tax purposes. You will not be penalized with a higher value because you submitted your information.

Income Valuation Data Requirements

To have an Income Valuation done on a parcel the owner or taxpayer representative must submit the following data for the following types of property.  Information must be broken out by Parcel prior to submission. The preferred format for submitting data is digitally and available by property type on /assessor/income.

Commercial/Industrial: (Buildings used for any purpose other than multi-family housing or guest lodging.)

• A complete copy of the lease for each tenant, with all addendums, extensions, and other amendments. The lease must state the number of Sq. Ft. being leased, or separate documentation containing this information must be submitted.
• 3 years of Annual Profit & Loss Statements showing income and expenses. The following IRS Forms may be substituted for Annual P & L Statements:
  • Schedule C, Schedule E, Form 8825, and all Statements pertaining to the appropriate form.

Multi-Family Housing:

• A Rent Roll from December for each of the past 3 years. Rent Rolls must include the following for each unit:
  • Unit #, Sq Ft., Bedroom/Bath, Asking Rent or Market Rent, Contract Rent, and any other charges paid by tenant.
• 3 years of Annual Profit & Loss Statements showing income and expenses. The following IRS forms may be substituted for Annual P & L Statements:
  • Schedule C, Schedule E, Form 8825, and all Statements pertaining to the appropriate form.
• Low Income Housing Tax Credit Properties must also submit documentation showing the Maximum Allowable Rents and Utility Allowances established by THDA and utilized by the LIHTC Development as of January 1st for each year that a Rent roll is submitted.

Mini-Storage Warehouses:

• A Rent Roll from December for each of the past 3 years. Rent Rolls must include the following for each unit:
  • Unit #, Sq Ft., Bedroom/Bath, Asking Rent or Market Rent, Contract Rent, and any other charges paid by tenant.
• 3 years of Annual Profit & Loss Statements showing income and expenses. The following IRS forms may be substituted for Annual P & L Statements:
  • Schedule C, Schedule E, Form 8825, and all Statements pertaining to the appropriate form.

Lodging Facilities: (i.e. Hotels Motels, B&B’s)

• Documentation stating the number of Rooms Sold each year for the past three years. The Facility’s statistics report usually has this information and if so, can be submitted for this purpose.
• 3 years of Annual Profit & Loss Statements showing income and expenses. The following IRS forms may be substituted for Annual P & L Statements:
  • Schedule C, Schedule E, Form 8825, and all Statements pertaining to the appropriate form.

Cell Tower Sites:

• A complete copy of the lease for the Cell Tower Site, with all addendums, extensions, and other amendments. The Lease must state the number of Sq. Ft. being leased, or separate documentation containing this information must be submitted.
• If the land owner incurs any expense in conjunction with the Cell Tower Site, documentation showing these expenses must be submitted for the past 3 years.

Ground Leases:

• A complete copy of the lease for the Site, with all addendums, extensions, and other amendments. The lease must state the number of Sq. Ft. being leased, or separate documentation containing this information must be submitted.
• If the land owner incurs any expense in conjunction with the Site, documentation showing these expenses must be submitted for the past 3 years.

Forms

• Apartment Income & Expense
• Commercial/Industrial Income & Expense
• Hotel/Motel Income & Expense