How To Retain The Most Re-Sale Value
A: If I were to rate in order the most important features of a property that will help you retain the most money in terms of ultimate re-sale value in a slower housing market, than it would be: 1. View/Sunlight, 2. Location, 3. Size, 4. Monthly's
In a slower market there is always more competition and less buyer demand. Put those together and there are a few MUST HAVE's that buyers will always look for and pay more money for. Lets go into the minds of a couple looking to buy a 1BR apartment in Gramercy with a budget of $550K. What would you look for?
View/Sunlight: If you have great sunlight and clear city views than you are in the perfect position to ask for top dollar value when pricing your property for sale. These days, I find buyers willing to sacrifice location (at least on a small scale) and consider nearby areas to live in as well. For the homeowner that makes the permanent features of your home that much more important; in this case, the VIEW and the NATURAL SUNLIGHT.
Location: I place location a very close 2nd behind view/sun. The only reason I dont rank this as #1 is because of buyers willingness to consider other areas. Simply put, buyers are tired of getting priced out of a market that is driven by prime location. The slowdown in demand is enough to cause some type of slowdown in the high end market (read my post on High End Blues).
Size: Raw Space in a good location with sun and views that is in horrible condition! Ahhh, the dream of so many wise real estate investors! Look for the wreck! Who cares if you don't have the money now to renovate. Suffer and live in a craphole until you can muster of enough money to renovate the kitchen, and then the baths, and then the floors. Size is the standard by which we calculate the purchase price and value. Damn, that is so important Im gonna say it again.
SIZE IS THE STANDARD BY WHICH WE CALCULATE PRICE & VALUE
Your broker should always tell you what the apartment you saw is asking per square foot? $800/Sq. FT? $1,200/Sq. Ft? You must know this. You also must know what the very last comparable (same unit) that sold per square foot? This is the info the appraiser will look into when calculating whether or not the apartment is really worth what the buyer has offered to pay.
Monthly's: Your monthly's are the total charge of the monthly maintenance and the monthly real estate taxes that you pay. If your monthly's are high, than you must lower your asking price to compensate. Vice Versa, except how much higher you set your asking price due to very low monthly's is still limited. In the end, the lower the monthly's are in the building you buy matter!
When you look to buy, think about when you will look to sell. Use view/sun, location, size, and monthly's as the main selling points when making your ultimate decision. These are the deal makers and breakers! Renovations can be done after and at your financial leisure and discretion. Do NOT use renovations as a deal maker if you are looking to buy; rather, try to find the wreck that is asking for less money and then renovate it yourself!
Originally Published 1/19/2006
Comments (6)
What weighting would you attribute to each of those qualities. For example, if I'm looking at an apartment with great location, size, monthlies, but bad views, how much should I discount the price based on a comparable apartment with better views?
Posted by Sydney | May 5, 2007 2:43 PM
Our co-op patricipates in the NYC RE tax Abatement
program. I received a SHE'S abatement lowering my
April maintenence charge by $1,972.71. This was
a direct reduction of maint. to me personally.
Now the co-op board approved an assessment
to recoupe the RE Tax abatement and my
May maint bill included an assesment of $778.19
I am in apt. 2D @ 342 East 53rd St. midtown.
How can they recoup a reduction
that they originally granted directly to me?
Posted by Nicholas T. Scheel | May 6, 2007 7:59 AM
Noah,
great article! I found it very helpful while going through a High Rise condo purchase in Austin, TX. Now I have a Sister who moved to NYC from Dallas and is considering buying a place near Manhattan. I've sent her this article.
Thanks
Posted by Jack | October 17, 2007 11:39 AM
convert all dead beat mortgages
to RENTAL PROPETIES, OCCUPANT
CAN STILL STAY IN PLACE, USE ANY
ESCROW MONEY PAID TO PAY RENT.
IF OCCUPANT CANNOT PAY RENT
THEN THROW THEM OUT OF THE PROPERTY
Posted by n scheel | December 12, 2008 8:53 AM
i m looking for an apartment to renovate in the east village maxi 500 000 buying budget
how could i search?
cathy
Posted by cathy | September 22, 2009 9:37 AM
Anyone caught "The Richest Man in Town" by W Randall Jones? I was suspect of this topic at first, but it is well worth the read. An excellent view into the mind of self made billionaires.
http://www.therichestmanintown.com
Posted by jake | November 24, 2009 11:39 PM