If you own a condo or are considering investing in one, there is probably one question that has crossed your mind.
How much is my condominium worth?
Finding the actual value of real estate properties is crucial for many reasons. You will get to know if you’re getting a good deal on a property you’re planning to buy or sell.
But, do not simply make it a guessing game. Reach the exact figure for your condominium after proper analysis. This way, you’ll not drive away from the potential buyers with an absurd sale pricing.
Here are a few things that can help you in figuring out the correct pricing for your property.
Get an evaluation done online
A quick way to give a rough idea of how much is your condo worth is, to get an evaluation. You can do this online, and you’ll be able to get an approximate value for your condominium in no time. All you need to do is, type in your address, along with a few variables, that will help you in figuring out the value.
These factors include square footage, amenities, number of bedrooms, public records, estimated market selling price, etc. After entering all these details about your property, you’ll be able to get an estimation in no time.
Yet, keep one thing in mind.
The number presented to you will just be a ballpark figure. It will not be the exact value as that will require a lot more factors to be considered.
Check the records
This is something most of the condo owners forget about! There are high chances that you have estimates of your property somewhere filed away. You can check your home property’s records for the following details:
Most of the homeowners have homeowners insurance. The estimate by the insurance company is based on your condominium. However, the cost of replacing the condo will be comparatively less as factors such as land, amenities, etc., aren’t taken into consideration. Therefore, keep in mind that the value will be a bit less, but it is still worth considering.
The government has its own assessment formula to figure out the tax that you will be required to pay. However, the assessment might not be recent. It can be of a few years back, but still, since it is a property tax assessment, considering it will be a great option.
Minor yet crucial factors that go missing when valuing condos
When compared with a house, it is easier to determine the value of a condo. This is because there are almost similar sales going on in the entire building. There are a few factors that help in accurately valuing a condominium. The most significant are:
Buyers pay higher prices for the condos that are located on higher storeys. Therefore, the more the height of the floor is, the higher will be the cost per square foot for the condo.
It goes unsaid that the layouts that offer more space will have more value. If there are more hallways or a bigger foyer, the prices will be relatively lower as these spaces are not very usable.
Diminishing PSF Returns on Size
The size of the condominium matters a lot, too. That is, the bigger the size, the lower will be the monetary value of the condo per square foot. Each square foot area becomes lesser valuable.
View affects the value of the condominium greatly. The better is the view, the higher will be the condo sale rates. For instance, if it faces Lake Ontario, its price will be way higher than those who have a standard view.
Exposure to Direction
The direction also affects the sale price of the condominium. This is because it sets the lighting of the house accordingly. For instance, east-facing condos witness sunrise and hence, are priced higher.
The condos that occupy the corner spot on the floor are priced higher as they offer better privacy.
Pricing strategy for the condo
There are different aspects to consider when developing a strategy to set the sale pricing for the condo. It differs for two major reasons, namely:
The supply and demand aspect
When the homebuyers are looking for accommodation, the feelings of buying are different when checking out a single house and when checking out a condo. This is because, in condos, the uniqueness factor is relatively lesser. You will find several units to be very similar to each other. Thus, the buyers don’t really feel that desperate to purchase a particular condo. Another thing in the back of their mind is that even if they miss purchasing a particular unit, they can find another similar one. Therefore, the pricing of the condo has to be set, keeping this thing in mind.
Less emotions involved
Emotional connect is usually more in single houses. The main reason being a particular layout having a beautiful backyard or a landscape, scenic view, etc. When it comes to condos, these sentiments are not very much present. However, some amenities hype up the condo’s worth. Therefore, one needs to find out different strategies while setting the rates for the condo.
Side Factors to Calculate the Condo Pricing
Here are a few side factors that also help in the determination of how much your condo is actually worth:
- Builders’ upgrades: The upgrades made by the builders do not enhance much value as you have already paid for these. However, they do set the condo apart from the other projects in the region, but it hardly makes any difference to the overall value of the unit.
- Renovations: When considering newly built condos, renovations are not of much relevance. However, renovations enhance the value greatly for older condominiums.
- Height of the ceiling: The taller ceiling is obviously going to cost better when it comes to condos. Therefore, the buyer will pay more money for condos with higher ceilings.
- Maintenance fee and extra charges: Maintenance charges impact the overall condo costs. In case the charges of maintenance are more, the condo prices need to be set lower.
- Parking space availability: Parking spaces definitely increase condo pricing. For instance, if you have a condo in downtown Toronto that has a parking space, its value increases by around $25,000 to $75,000.
- En-suite storage space/locker facility: Locker facilities and storage spaces in the condo are in high demand these days. Therefore, if your condo has this facility, it is generally priced higher than many others that do not have them.
- Amenities: Some homebuyers might not be that interested in the amenities offered. However, a majority of the buyers in today’s times look for facilities such as swimming pool, lounge, gym and fitness studios, gardens, etc.
- Region of the city: The location and address of the condo is a crucial consideration. This is because a lot of other things are dependent on it. For instance, the availability of basic necessities, entertainment spots, transit options, community, etc. are all essential factors for some buyers.
- The renters to owners ratio: A lot of homebuyers seek condominiums where there are more owners rather than renters living in the condos. Therefore, this factor comes into play while determining the condo’s worth.
- Building’s reputation: The building’s reputation is initially determined by that of its developer. This is because construction quality has a major role to play in it. Next, there are other things like legal issues, demographics of the residents, etc. that make up the reputation of the building.
What will be the worth of your condo in 5-6 years?
There is no fixed answer to this question. You can’t really generalize the increase or decrease in the cost of the condo. This is because several factors are important when considering condominium costs. We have already discussed the most crucial of these above.
Moreover, it is important to understand that statistics do play a role in determining the real estate prices. However, they are not an ultimatum.
Experts say that the price at which you buy the condominium is more important than the worth at which you sell it. This is because your profit depends on this cost.
Seeing long term trends, there is an appreciation by about 5-6% every year in the price of the condos. This rate depends upon the market’s trend as well as the initial pricing of the condos.
A lot of things will determine the final price of the condo in a location like Toronto. If you wish to estimate the price of certain condominium properties, it is important to be familiar with the factors associated with condo pricing. Get an idea from multiple sources about the trends going on in the market at present. You can also seek help from trusted online resources.
Whether you’re planning to buy a condo or put yours on sale, determining its actual market value is a crucial step.
Get in touch with a reliable real estate agent in your neighborhood to get a fairer idea about the real estate market. The team at Precondo is always happy to help.