Market Analysis
When evaluating a property, there are key elements that make the difference between a basic approximate evaluation and knowing the characteristics and elements that justify an accurate market value. With a very in depth and detailed analysis, the price can be determined with clarity and without any vulnerabilities during potential negotiations.
What is the important information for sellers to know and what we gather:
CONDOS
– Determine average price per sqft for all the sold units in the building. Going back a maximum of 12 months.
– Look at the most comparable units in terms of size and number of bedrooms and determine the price per sqft.
– Determine added value or adjustments. Ex: value of parking, which floor, views, balcony/terrace, renovations. Typically condos were sold at approx. 3,000-5,000$ more per floor. Parking downtown can vary from 50-100k depending on the building.
– Determine the average number of days it take to sell (days on the market)
– Number of comparable properties there are currently on the market (your potential competitors)
– Take into account the year of construction, amenities in the building, rental value of the units.
HOUSES
– Look at the homes of a similar size that sold on the same street or within a 1km radius.
– Determine the difference in living space and also the size of the lot/land.
– Budget the difference in renovations
– Determine the average number of days it take to sell (days on the market)
– Number of comparable properties there are currently on the market (your potential competitors)
REVENUE PROPERTIES (PLEX)
– Use the revenue to establish the ratio (Cap rate or Gross revenue)
– Determine the average sale price vs the revenue ex: 20x Gross revenue or 4% cap rate
– Determine the max potential revenue if the building is optimized
– Budget the amount of work needed to optimize the property.
– Determine the average number of days it take to sell (days on the market)
– Number of comparable properties there are currently on the market (your potential competitors)
With this information we prepare an in-depth market analysis and determine a very accurate value for your property and position yourself perfectly in the marketplace. Of course it’s important to have the knowledge of the area, the services, schools, public transport etc. You need to know the market in your area. This will influence how you want to position your property and your strategy for pricing.