Vacant Homes vs. Tenant-Occupied: Which One Appraises Better?

Does Who Lives There Matter?

If you're preparing a property for appraisal—whether for sale, refinance, or investment—you may be wondering: Does the occupancy status of a home affect its value? Is a vacant property appraised more favorably than one that’s tenant-occupied? Do tenants make an appraiser’s job harder—or easier?

At Cade Appraisals Inc., we’ve appraised thousands of properties across Niagara, Hamilton, and Southern Ontario, and we’re here to clear up the confusion. The short answer? The physical condition, location, and market trends determine value—not who’s living there. But occupancy status can influence how a home presents, how accessible it is, and how buyers perceive it—all of which may influence appraised value indirectly.

Let’s explore how appraisers handle both vacant and tenant-occupied properties—and what that means for homeowners, investors, and landlords.

Appraisal Basics: What Actually Drives Value?

Before diving into occupancy status, let’s review what determines property value from an appraiser’s perspective:

• Location and lot size

• Structure type and layout

• Square footage (above grade and basement)

• Age, quality of construction, and condition

• Renovations and upgrades

• Comparable sales in the area

• Zoning and permitted uses

• Legal status of any rental units

• Market trends (supply vs. demand)

  
  

Appraisers are trained to remain objective, using evidence from the market to support their conclusions. Whether a home is occupied by the owner, a tenant, or is vacant doesn’t directly change the appraised value.

That said, presentation, access, and information flow can influence how efficiently an appraiser is able to complete the valuation—and sometimes, that does affect the result.

Vacant Homes: Pros and Cons

Pros of Vacant Homes for Appraisal

1. Easy Access for Appraisers

   • No need to coordinate appointments or wait for keys.

   • Appraiser can take their time inspecting every room, attic, basement, and mechanical system.

2. Clean Slate for Measurement

   • No furniture or clutter makes measuring rooms and assessing layout much easier.

   • Clear view of walls, floors, ceiling conditions, and repair issues.

3. Unobstructed Photography

   • Empty spaces photograph better for comparables, especially when staging isn’t feasible.

   • Photos without personal items often look more professional.

4. Neutral Presentation

   • No tenant mess, unusual odors, or lifestyle quirks to distract from the property’s features.

   • Buyers—and sometimes appraisers—have an easier time visualizing potential.

Cons of Vacant Homes

1. Signs of Neglect

   • Unattended homes may appear poorly maintained.

   • Uncut grass, stale air, low temperatures, or dust can hurt perception of condition.

2. Security Risks

   • Vacant properties may be targeted for vandalism, theft, or squatters—especially if boarded up.

3. Utilities Turned Off

   • Appraisers may not be able to verify plumbing, heating, or lighting systems if utilities are off.

   • In winter, this raises concerns about burst pipes or frozen damage.

4. No “Lived-In” Warmth

   • Even though appraisers are objective, a warm, cared-for home can positively influence perception.

Tenant-Occupied Homes: Pros and Cons

Pros of Tenant-Occupied Homes

1. Ongoing Maintenance

   • Daily living can help reveal if systems work: heat, plumbing, electricity, etc.

   • Tenants may report issues early—especially in professional-managed properties.

2. Rental Income Data

   • If the property is income-generating, tenants allow appraisers to apply the Income Approach to value—particularly important for duplexes, triplexes, and legal ADUs.

3. Demonstrated Livability

   • A well-maintained tenant space shows that the home is safe, comfortable, and desirable to renters.

Cons of Tenant-Occupied Homes

1. Access Challenges

   • Scheduling the appraisal can be difficult, especially if the tenant is uncooperative or unaware of the purpose.

   • Missed appointments or limited access reduce appraisal quality.

2. Mess, Odors, or Clutter

   • Appraisers assess condition—but clutter or strong odors can obscure features or create a negative impression.

   • Tenants aren’t always motivated to “present” the space.

3. Blocked Areas

   • Locked rooms, overfilled garages, or storage in front of mechanical equipment can prevent full inspection.

   • Appraisers may be forced to make extraordinary assumptions—which lenders often flag.

4. Uncertainty About Lease Terms

   • If lease agreements aren’t provided or tenant legality is unclear, the appraiser may exclude income-based valuation or discount potential market value.

Does Occupancy Influence Marketability?

From an appraisal perspective, “marketability” refers to how easily a property would sell at fair market value.

• Vacant homes are easier to show but may raise questions for buyers:

  • Why is it empty?

  • Has it been sitting too long?

  • Is it “stale” on the market?

• Tenant-occupied homes often come with legal lease obligations:

  • Some buyers won’t consider tenant-occupied homes if they want to move in immediately.

  • Investor buyers may love the income, but only if the rents are strong and the tenants are reliable.

    
    

In short: Appraisers assess marketability, and occupancy status can be a factor—but only if it influences demand or introduces uncertainty.

How Appraisers Adjust for Occupancy in Practice

1. For Owner-Occupied Homes Typically treated as standard. No adjustments made for who lives there.

2. For Vacant Homes

   • May be flagged for potential deferred maintenance, especially if left unheated or unmonitored.

   • If comps are also vacant (e.g., new builds or flips), this is noted and matched accordingly.

3. For Tenant-Occupied Properties

   • Appraiser may request rent roll or lease agreements.

   • If the property is being valued based on rental income, tenancy has a direct effect on valuation.

   • If access is restricted or areas are unseen, the appraiser includes limiting conditions and may apply conservative estimates.

Case Study: Niagara Duplex – Owner vs. Tenant Occupied

• Property A: Owner-occupied legal duplex in St. Catharines, fully accessible, staged and clean.

• Property B: Identical duplex on the same street, tenant-occupied with expired lease, access restricted to main floor.

Appraised Value Results:

• Property A appraised at $640,000 using sales comparison and income approach (confirmed market rents).

• Property B appraised at $610,000 due to limited access, unverified rental income, and condition uncertainty.

Takeaway: It wasn’t the presence of tenants that hurt value—it was the difficulty in verifying income and condition.

How Homeowners and Investors Can Prepare If the Property Is Vacant:

• Keep utilities on for inspection.

• Ensure the home is clean, heated (or cooled), and smells fresh.

• Tidy up the yard and remove mail or debris.

• Leave a light on or stage the main rooms if possible.

If the Property Is Tenant-Occupied:

• Give tenants adequate notice of the appraisal date.

• Ask tenants to secure pets, unlock all areas, and minimize mess (offer incentives if needed).

• Provide the appraiser with:

  • Lease agreements

  • Recent rent receipts

  • Any repair history or upgrades during tenancy

  • Contact info for property manager (if applicable)

Final Verdict: Which One Appraises Better?

There’s no universal winner. Appraisers are trained to remain impartial and base value on evidence and condition—not occupancy status.

But in general:

• Well-maintained, fully accessible homes—regardless of whether they are vacant or tenant-occupied—are more likely to appraise at the top of market range.

• Limited access, unclear tenancy, or poor presentation can create doubt, require assumptions, and may lead to lower valuations or lender flags.

It’s Not Who Lives There—It’s How the Property Shows

While tenant occupancy or vacancy can influence presentation, the appraised value is ultimately tied to market data and property condition. If you're preparing a property for appraisal, the best thing you can do—regardless of who lives there—is ensure:

• The home is clean and accessible

• Documentation is ready

• Any known issues are disclosed up front

  
  

At Cade Appraisals Inc., we work with homeowners, landlords, and investors across Ontario to deliver accurate, lender-compliant, and CUSPAP- standard reports. We know how to navigate both tenant and vacant scenarios to provide the most accurate and fair market value.

Need a property appraised—vacant or tenant-occupied? Contact Cade Appraisals Inc. for professional residential and investment property appraisals across Niagara, Hamilton, and surrounding communities.