Church property valuation is not the same as residential or standard commercial appraisal. Appraisers often struggle with church buildings because comps are limited and the highest-and-best-use is usually not religious. Here is how we approach it.
We start with the land value as if the building were not there. That is our floor. Then we add the building value based on replacement cost minus depreciation, condition, and conversion suitability. Then we apply the income approach based on what the converted property could rent or sell for in the current market.
In most Texas and Louisiana markets we work, the land value is forty to sixty percent of the total value for church properties. The building contributes the rest, but only if it is structurally sound. A church with foundation issues is worth land value minus demolition cost.
We have seen church appraisals come in low because the appraiser used only religious-use comps. That understates the value. We push for an appraisal that considers conversion potential, and we have successfully appealed low values with documented rental comps from converted nearby properties.