Compare like for like when buying property

Compare like for like when buying property

You're surfing the Internet, and you find an apartment in Bulgaria that's 20,000 cheaper than the going rate. Bargain! Or is it? It might look the same as other apartments in the area, but there could be crucial differences, so you're not actually comparing like with like. It's vital to factor in these elements when rating properties.

How high?

Even in the same development, a ground floor apartment will never be worth as much as a top floor with views. An exception is when a development is geared towards the elderly, in which case the ground floor will have a higher price tag. Aside from that, there is no hard and fast rule on how much more each floor is worth in value or percentage terms. But researching neighbouring developments and working out how they have priced their apartments by floor can give you a good basic guide. Additionally, you need to allow for views and aspects. In Europe, south-facing views are typically more expensive as the light is better and there are more opportunities to soak up the sun on the balcony. Developers will also charge more for sea views.

Pools and other extras

Take into account on-site gyms, 24-hour concierge services, sports facilities and suchlike. Within developments, these facilities can also be an indicator of places that may experience more capital growth. But if you're comparing villas, the presence of, say, a swimming pool will clearly impact on any price comparison.

Size matters

Different countries have different ways of measuring the size of a property for sale. In fact, in some countries this can vary between developers, so you may need to double-check how they have arrived at their measurements. In the UK, for instance, it is usual for developers to exclude the terrace space when quoting the area size. This may well have something to do with our climate - terrace space is not as important in the UK as in Spain, for example. In Hungary and the Czech Republic, it is normal for a proportion of shared terraces and gardens to be included in the area size quotes. In Bulgaria, they will also allocate a percentage of the common parts to the size of the unit quoted. It's useful to know all this when comparing between countries. But it is also important to be sure of what is included when comparing properties in the same town. There's no right or wrong way to do these calculations. You just need to be aware of the different systems when comparing between various developments or even countries.

What about the land?

Land size becomes more important when weighing up different houses or villas. All other things being equal, a house sitting on a 4,000-square-foot plot will obviously be worth more than an identical house on a 2,000-square-foot plot. But by how much? You can work out the price you're paying for the extra land by looking for similar houses on different plot sizes and working out the price differential. As a rough guide, land is generally worth around 20 per cent of the price of the property per square foot. So, if you are paying 250 a square foot for a house and are comparing this house to one with a smaller plot, the extra land on your plot should cost around 50 a square foot. This will vary depending on how expensive land is in the area. In many eastern European countries, land is still a smaller portion of a developer's costs than it is the UK, so this 20 per cent rule is usually sufficient. In the UK, where land is at more of a premium, this could rise to 30 per cent. Only thorough local research will leave you properly informed.

Jonty Crossick is MD of the international real estate company Ready2invest. For further information on property investment strategy, call Ready2invest on 01273 627 900 or visit their website:


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