Before reaching a specific sale price you need to gain a strong understanding of the market. More specifically, the sale prices of similar properties as well as a keen understanding of the value of the differences of your property verses those similar properties.
I'm wondering when you received the property, because when you inherit property the fair market value is assessed at the date of the death. If it was fairly recent then that value may be used as a starting point, but be sure you are comfortable with the valuation method used. If your parents passed away a long time ago, then the valuation probably wouldn't be so relevant.
Analyzing the Market:
A method that many sellers use to gauge the value of their property is to look at the sale prices for similar properties in the area. So, if there is another rental property that is similar to what you own that was recently sold, you can use that price as a starting point.
Reviewing the Income Generated:
There is also a valuation tool called the gross rent multiplier (GRM) which is used to figure out a sale price by comparing it to a similar property with rental income.
Specifically, compare your rental income by a comparison factor, or the monthly rental income and actual sales prices of comparable properties that were recently sold in the area. For instance, if a similar property generated $5,000 in rent a month and was sold at $1,000,000, the rent/sale multiplier would be 200 ($1,000,000/5,000=200). So, if your family's property was rented for $15,000, then the estimated sale price would be 3,000,000 ($15,000*200=3,000,000).
Once you complete your analysis, present the information to your siblings with all the details and background information, as well as the logic you used to reach an asking price. The more clear and logical you are, the better your chances of reaching an agreement with your siblings.
Separately, make sure you consult with an estate tax expert because these situations can become complicated and you will want to make sure that you put yourself in the best possible position from a tax standpoint as well.
Ryan Himmel, CPA and registered securities analyst, is the founder and CEO of BIDaWIZ.com, a professional network for small businesses and entrepreneurs to obtain trusted advice and services from a team of CPAs, Enrolled Agents, Financial Planners & Tax Attorneys. His team provides answers to the many finance and tax questions that small businesses encounter every day. Ryan has been quoted in The Wall Street Journal, Forbes, Fox Business and Crain's New York, among other publications. Ryan also regularly contributes to the community with his finance and tax blog.