How would you see this?
A property (standard house) was sold by the developer to an investor 10 years ago. The house had various tenants over time. No investments were made, so significant wear and tear is visible, and investments are currently needed and foreseeable. The garden is also not landscaped. Prices for comparable new-build properties appear to have increased by about 30% (not in a major city, but in a sought-after area with limited supply). For a comparable new build (compared to the property’s original condition), the price today is around 400,000. What would be your benchmark for the existing property?
A property (standard house) was sold by the developer to an investor 10 years ago. The house had various tenants over time. No investments were made, so significant wear and tear is visible, and investments are currently needed and foreseeable. The garden is also not landscaped. Prices for comparable new-build properties appear to have increased by about 30% (not in a major city, but in a sought-after area with limited supply). For a comparable new build (compared to the property’s original condition), the price today is around 400,000. What would be your benchmark for the existing property?
H
HilfeHilfe27 Sep 2019 20:55Greenie schrieb:
Of course, they are allowed to make a profit, that’s fine. I was just shocked by the scale of it. But I wouldn’t mind if I weren’t worried about losing too much myself (because it seems so inflated right now). We’re talking about an ordinary little house that would suit us now, but might be sold again in ten years. The location of the town is very good, but within the town it’s rather average—not a dream location. Don’t you read the news...? Loans are cheap, interest savings are quickly wiped out by “value increases.” Personally, I wouldn’t sell for less than it’s worth either. Why would I?
Hello Yvonne, thank you. I don’t want to speak negatively. I consider the house to be average. At a fair price, it would be suitable for us. There are advantages, but it’s not something that will attract a lot of buyers. We don’t want to overpay because we might sell again, and it’s not a dream property. Maybe in ten years we could spend twice as much, but we don’t want to do that now.
H
HilfeHilfe27 Sep 2019 21:13Greenie schrieb:
Hello Yvonne, thanks. I’m not trying to speak badly about it. I consider the house to be average. At a fair price, it would be good for us. There are advantages, but buyers won’t exactly be lining up. We don’t want to overpay since we might sell again, and it’s not a dream property. Maybe in ten years we could afford twice as much, but we don’t want to do that now.Why do you think buyers won’t be lining up? It only takes one higher offer, and you’re out.Yes, I know that. We haven’t even started negotiations yet. And that’s exactly what concerns us. It would be frustrating if another buyer pays $5,000 more than the maximum price we’ve set as our limit. It just feels like it’s more like $50,000 too much. Is this purchase price to annual rent ratio even realistic anymore, or can a factor of around 30 really be justified in rural areas (even if in the metropolitan outskirts)?
H
HilfeHilfe27 Sep 2019 21:25Greenie schrieb:
Yes, I know that. We haven’t even started negotiations yet. And that’s exactly what concerns us. It would be frustrating if another buyer offers $5,000 more than the maximum price we’ve set as our limit. It feels like the difference is more around $50,000 too much. Does this purchase price-to-annual rent ratio even exist anymore, or can a factor of around 30 really be justified in rural areas (even if in a metropolitan outskirts)? There is no such factor. How long have you been searching? Do you have a sense of prices in your area?