I’m A Professional Appraiser: Here’s How Much I Think Trump’s Mar-a-Lago Is Worth

Unless you’ve been living under a rock the last few years, you’ve likely caught wind of the controversy surrounding the true value of Donald Trump’s Mar-a-Lago estate. And with numbers ranging from $18 million to over $1 billion, it makes sense that people are asking where this discrepancy is coming from and what the true value actually is.

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GoBankingRates reached out to professional appraisers to receive their input and was met with various versions of “it’s very complicated” because of what Marcus Hill, CEO and appraiser at Plugstar, called, “a lot of moving parts.” Here’s why:

After purchasing Mar-a-Lago in 1985, Trump found the $3 million annual upkeep of the property too expensive. He, therefore, changed the designation of the property in 1993 from a residential home to a private club via a deed granted by Palm Beach so that he could charge membership fees to maintain the grounds. He then re-classified himself as an employee to legally live there full time. Due to these deed restrictions, the property is currently valued as a private club by Palm Beach County. But, should the club be down-zoned back to a residential home (with the explicit permission of Palm Beach) if or when it hits the open market, the value of the property would skyrocket exponentially.

The first logical question that must be asked: could the deed legally be reversed? That depends who you ask.

According to reporting by Darrell Hofheinz of the Palm Beach Daily News, “The deed restriction would seem to prevent anyone from buying the estate for use as a private residence rather than a club.” (A gaffe that landed Trump in hot water when he valued the property as a residential home to allegedly borrow more money from banks). But, according to real estate attorney John Shubin who testified on behalf of Trump, “Mar-a-Lago would revert to a residential use if the club were ‘abandoned’.” It’s rational to assume that whatever legally constitutes abandonment could eventually be under a microscope.

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Whether Mar-a-Lago should be appraised as a private club or a residential home is not for us to decide. But let’s take a look at both scenarios.

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Private Club

According to the Palm Beach County Property Appraiser’s Office official government website, Mar-a-Lago was assessed at $37 million as of January 1, 2023. Due to the listed $4 million appreciation between 2021 and 2022, and the $6 million appreciation between 2022 and 2023, it’s logical to assume the value sits somewhere over or near $40 million today. So what factors contribute to this appraisal?

Speaking to Newsweek, the Palm Beach County Property Appraisers Office said they use the income approach. “The income approach to valuation capitalizes the net operating income that private clubs could generate. This means that the value of the property is determined based on the amount of income that it generates as a club” — a number that is kept confidential by law.

It’s important to note that the market value is typically higher than the assessed value which is used primarily for tax purposes. This assessed value does not take into account market conditions or whose name is on the property.

If the club were put on the market, however, a sales comparison could also be utilized. According to state-certified real estate appraiser, Robert Callaway, whose company, Callaway & Price Inc, appraised Mar-a-Lago years ago when the estate was under previous ownership, this comparison becomes difficult because there are no real comparables.

“The problem then becomes there’s not a lot of sales of private clubs,” stated Callaway, “so you have to look state-wide, maybe even nation-wide for comparable sales.”

He noted that the age of the property (originally built in 1927) also makes it difficult to utilize any cost approach to value.

Residential Home

In a scenario where “the deed restriction was overturned, or the property improvements burned to the ground, or were demolished by a hurricane or natural disaster,” stated Callaway, the value of Mar-a-Lago as a residential property “would increase because the value of the land in the area is increasing exponentially.”

For reference, Newsweek reported that “Dorothy Jacks, elected property appraiser of Palm Beach County, said [some individual] home values […] have risen by as much as 25 – 30 percent per year.” Former investment banker John Lefevre cited an empty, 2.3 acre lot in the area listed at $200 million. Mar-a-Lago is 17 acres.

Callaway further stated that “market value is based on a theory of highest and best use which has several components: legal use, physical use, financial feasability, and maximally profitable use.”

If deemed legal to down-zone Mar-a-Lago to a residential home, the property scores well on all components. “If you have residential land all around you, that’s highest and best use. No one would want to limit use to a club when you could sell it for hundreds of millions of dollars more as a residential property,” said Callaway. This would also increase nearby property values by eliminating traffic congestion and protestors.

From a nuts-and-bolts perspective, Marcus Hill noted the scope of difficulty in appraising a property that is 126 rooms and 62,000 square feet. In addition to taking measurements of the entire estate, an appraiser would have to “go into every room labeling the room type, counting bedrooms and baths, with noting the condition of the rooms” and any upgrades that have taken place over the last ten years.

Then, of course, there is the Trump name that is synonymous with Mar-a-Lago and could influence market price in either direction. And once a number is decided upon, that still may not account for bidding wars amongst wealthy buyers either eager to take ownership of the historic property or content to underbid a heavily tainted estate.

While Rosalind Clarke, a Palm Beach real estate agent, estimated “a sales price in the range of $500 million” in December of 2023 to the BBC, no responsible appraisers GoBankingRates spoke with could even gander a guess at Mar-a-Lago’s potential market value. Perhaps time will tell.

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This article originally appeared on GOBankingRates.com: I’m A Professional Appraiser: Here’s How Much I Think Trump’s Mar-a-Lago Is Worth