How do you work out the value of a unit?

Despite the analogy, this may actually be a stupid question...

Of course comparing a sale price with current & past sales gives you a rough idea about what the market value is - but are there any more concrete ways of assessing a unit's value?

When you have a plot of land with a property, this gives you a reasonable starting point in determining the value of the house through accessing a council land valuation and then making any additions to that value for the dwelling. Generally I try to buy a property for a price that is over 75% of what the unimproved land value would be.

But obviously this formula doesn't apply to units.

For example (figures are not accurate):
- 90sqm unit in Ryde
- Approx land value is $700sqm
- 90 x 700 = $63000

...and good luck trying to find a unit in Ryde for that price.

What formulas and things to consider do you apply in determining the value of a unit?

 

Hi,

As someone who just signed an offer on a unit and is waiting for settlement (as a place to live) here are some of the things I have been looking at whilst looking around (apart from the usual real estate factors that go for all dwellings):

- the number of units on the block.. a lot of units are simply a larger block of land strata titled into 2 smaller lumps of land with some common land and no active bodycorp. Others have dozens of units and a bodycorp apparently staffed by bored retirees who love making up rules and regulations and getting signs put up everywhere (this however may suit some people).

- common walls with the neighbors or freestanding (more like a small house).

- "private" feel or will the neighbors be walking/driving past your kitchen window every morning (depends on the layout), if it has its own garden/front yard, etc.

- Is the common land just the driveways, or does it cover more (in the place I rent now, looking at the title my rear courtyard appears to be actually common land, the title for this unit only goes to the walls, not outside).

-own garage attached/next to the unit, or parking spot/carport in some central area.

-own street frontage or not.

But I think the value or for a similarly sized "2 bedroom unit" can vary widely depending on the factors above. Well they are what I was looking at.

 

I try to purchase units with as high a land content value as possible, by sticking to small blocks for the particular area. This also increases your "control" in strata issues, especially if you own more than one in the block. However, naturally your land value content is going to be significantly less than freestanding housing or duplexes etc, due to the nature of strata dvpts.

As far as other factors go, look for a well maintained block and good strata records (a strata search by your conveyancer will reveal any problems), preferable to also have majority of owners in the block, as they tend to take more care than absentee landlords and generally will care more for the common areas as well- ensuring that they're tidy and up to scratch.

Close proximity to transport and shops is a must, as is a carspace and outdoor balcony area. Own laundry also preferable, but depending on budget, I'd forgo this for parking or a balcony as most unit blocks have sufficient share laundries.

 

I thought you had missed a zero on the end or something, then I read the next line and chuckled...

Cheers,

Dan

 

Good advice Jacque & ARP.

Now that's what I would call a bargain!

 

So has any of this been helpful in you making any decisions yet, Dexter?
Please keep us posted

 

Sure has Jacque - mostly confirming what I already had earmarked as ways of distinguishing a good unit from the rest.

I guess it also confirmed there isn't a measurable benchmark like you have for assessing land value.

Heads up though - I'm likely going to contact you in the next couple of months to solicit your services in finding me a Sydney unit!

 

I look forward to helping you Dexter

By the way, in case you haven't already read it, the NSW Dept of Fair Trading site has some great info on buying into strata schemes. Here's one of them:

Buying into a strata scheme - NSW Office of Fair Trading