How is the value of your apartment calculated? Oftentimes real estate agents will look at the sales statistics for the apartments in your building and base the current value of your apartment off these previous numbers. But how can sales in your building alone be an accurate gauge on price?
The value of your apartment is usually calculated by a number of factors including recent sale prices, sales in the buildings and the most important like for like buildings in similar areas.
Firstly, we look at apartments that are the same, these are usually in the same building. Most agents stop there; we go further and look at other buildings that are similar to help us gauge the real market value of your property.
This is where our expertise are superior, we have the knowledge of all the buildings in Auckland and understand our market well.
Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
We can market your apartment without even entering the building as we have floor plans of all buildings in Auckland and know these buildings inside and out.
What is the difference being a specialist for you, an apartment owner looking to sell? With thousands of apartments in the Auckland CBD and surrounding suburbs and at least 100-150 apartments selling every month, you need the right information so you can make the best decisions for you.
Apartment specialists looks at the value of apartments, not just in your building, but of those in the surrounding buildings as well. The apartment market moves all the time and we make sure we’re aware of it when valuing your apartment.
In this video you’ll see a real estate agent missed out on $61,000 because there were sales occurring at the time that didn’t show up on the sales statistics.
My apartment worth is found out by speaking to a specialist. At Apartment Specialists we know our market well and can give you a well-informed, educated and up to date value on your property.
There are over 26,500 apartments in the Auckland CBD and fringes and around 395 buildings which will become up to 450 in the coming years. Each month there are 100 to 150 sales of apartments.
We know this by understanding our market well. This is done by constantly keeping up to date and being in the know. It is not just about being an agent but about being a specialist in the market.
We look at apartments that are the same, these are usually in the same building and look at other buildings that are similar to help us gauge the real market value of your property. Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
By being well informed, we can help you make the best decision that works for you and selling your property.
As an apartment owner, you may wonder how they calculate your body corporate fee and what are the factors they usually take into consideration? This podcast will answer some of the most significant questions concerning this topic. Andrew will go into detail as he shares his expertise and knowledge on body corporate fees.
Good day, Andrew Murray here from the Apartment Specialists, talking about Auckland apartment sales or Auckland apartments for sale, and questions I often get asked.
Now, the big one I get asked is, how is it decided what your body corporate fee is? Where do they come up with this figure? How come this apartment has a higher figure than its fee? Some of them actually don’t make sense. Now, I’ll explain it to you, it comes down to value. What your apartment is worth, is what you’ll pay in body corporate fee. The way it looks at is, let’s say all the apartments are worth x amount of dollars.
Your apartment will be worth on a round figure, a certain amount – your type of apartment. That value will be represented as a percentage. That will be then transferred into what’s called shares. Now, most apartments in the Auckland City or Auckland CBD, have 10,000 shares. So, your apartment will have a certain amount of shares. That amount of shares will represent a percentage, which is called a unit entitled. When you have your budget – let’s say if it’s 500,000, and your percent is say 1%? Well, 1% of 500,000, means that you’re going to have to pay $5,000 in body corporate fee.
It sounds a bit confusing, but an easy way to think about is your value. The value of your apartment decides the share or percentage, which is your unit entitlement, so the percentage you pay of the overall budget. Where you’ve got ones which are out of sync, which I come across from time to time, it’s because either they were set up incorrectly or say something’s happened like maybe, one side of the building’s lost its view? So, those apartments aren’t worth as much, so then those unit entitlements actually need to be altered. Unfortunately, there’s a costing involved.
Then it comes down to to your owners committee, you’re going to have a meeting. Some people realise all of these values go down, body corporate fees they might go up, so there’s a bit of a discussion. What’s fair is, they should get a valuer around. It costs around $5,000 to do the building. They’ll value the building, and they’ll give you their professional opinion on what the unit entitlements should be or percentages or shares, however you want to put it – of the units. They’ll decide what is fair in regards to paying how much you pay.
When you’re looking at value, generally speaking, that’s why as you go higher up in a building, you’re going to be paying more body corporate fee, because the the higher up you are, the better view you have, the more light you get, the less noise, so the value increases – all that kind of thing. Also about the size, generally the larger an apartment the more value, so then you’re going to be paying more of the body corporate fee. That gives you an idea, so purely it comes down to figuring out your body corporate fee for an Auckland apartment is through them.
Simple rules that agents or private sellers can follow to establish a better relationship with a tenant and make selling a tenanted Auckland apartment a smooth and easy process.
Andrew Murray, Apartment Specialists. When selling your Auckland apartment, what happens to the tenants?
Now, there is a very good chance that when you sell your apartment it is going to have tenants in it. Being that between 65 and 70% of all Auckland apartments are tenanted. So, a huge concern with owners is when they do come to sell their apartment, what is going to happen to their tenants? Because it is their income stream. So they are worried that the tenants are going to go elsewhere or they are going to start looking or they are going to stop paying you rent. Now, that is a valid concern. But it can be made not a concern at all by following a few rules that we outline when we deal with every tenant.
Now, it is very common for us because at Apartment Specialists, just doing apartments means we are dealing with tenants all the time. The first thing is – the simple basic steps I follow is – respect the tenant because it is their home. Treat them as you want to be treated. Very, very simple, but often forgotten.
Now, create a relationship with the tenant. Actually explain the process. Make them understand their rights. Make them understand that a tenancy agreement is more powerful than a sale and purchase agreement. So we cannot kick them out. Explain that if it does go to an owner-occupier, their tenancy agreement still stands and notice has to be given. Explain to them that your job, or what an agent’s job is, is to sell that apartment as quickly as possible; and for the highest price possible; and to annoy them the least amount possible. And then to enable that to happen, it would be great that if they could help, if they could keep the place tidy. And when they realize that they are actually helping the situation, they often come to the party.
Now, another one is communication. Now, that is a big one. Arrange a schedule of viewing times so they know. Arrange it around them. Put them in control. Have the times each week so they know when it is happening. And you still ring them the day before to remind them. Have it maybe every Tuesday and Thursday afternoons and a Saturday. Or have it Saturday between 12 and 1, and Sunday between 12 and 1, and Thursday afternoon. Have it consistent. Work around their schedule and work with them and through that, they all often give you a key. Give you access and let you go whenever you want. But through putting them in control, it puts them at ease and you explain what the risks are and they are minimal from their situation. And you will have very happy tenants and a very smooth sale process because at the end of the day, they are the gatekeepers. And you have got to look after them as much as you look after the owners that that you are selling the apartments for. The only valid concern that can be dealt with very easily, if done properly.
Hope that helps. And I am not too sure about what I am talking about next week. I was thinking about it and I guess you are going to find out.
Auckland apartment valuation is done using different methods like actual comparison of purchase price or meterage. It all depends on the valuers. However, this podcast will help you look into your apartment and show you how you can increase its value.
Andrew Murray, Apartment Specialists. How is an apartment valued?
Now, an apartments’ size does matter more than houses. More than anything else. And the reason why is the value of an apartment is all brought down to the value per square metre. For example, if you purchase an apartment for $400,000 and it is 100 square metres, well then the value of the apartment per square metre is 4,000 – per square metre.
What a valuer does is they come in, they talk about the market. A lot of this is copy-and-paste stuff. But really it comes down to the sales they use. And the valuer decides what sales to use. So there is a big grey area here. There is a lot of discussion that can be around – on the equity, on valuations – because the valuer can choose high sales in the building or low sales to compare. And they find values to support the value for something sold for. But anyway, stop worrying about it.
So, how it is done is for example here, this is a property in a character building and so what I have used to compare similar buildings in sales in buildings and taking every single one down to a square meterage. Say 24 Anzac Avenue, it is a three bedroom brought down to $3,496 per square meter because it is 163 square meters and it was sold for $570,000. Okay, one in the Metropolis. Okay, $540,000, 85 square meters. Divide 540 by 85, it gives you $6,353. And so, it is all about the sales price divided by the square meterage and it gives you the value.
You can see here they also use one in the building which generally is most reliant because they are much more comparable. So, for example 1C $220,000 which has 43 square meters divide 220 by 43 and it gives you $5,116 square meters.
Anyway they look at all of that giving more weight in general to apartments being sold in the building and you have evaluation. A hundred square meters and $5,200 when it costs $520,000. Now, the actual purchase price of that apartment is very similar to that and that is what most valuers will do. They will come up with evaluation very similar to the purchase price because that is what the market has shown. And they use the sales through square meterage to show us. Now, what is a very interesting question is, different valuers can show completely different values and neither is wrong.
So, it is a very interesting process. But I hope that gives you a bit of an insight to how apartments are valued. And then it will help you look at your own apartment. Or help you when you look at the value of other apartments – that compare one sale for or another sale for. And at the same or similar kind of apartment – and take it down with a square meterage. I hope that helps.
Next week I am going to be talking about– the question I am always asked, “When should I sell my apartment? How do I know?” And back to apartment sales.
Apartment Specialists provides you with list of information that will help you figure out the best time to sell your Auckland apartment.
Andrew Murray, Apartment Specialists. Today we are talking about a question I get asked every single day – I know I have said it quite a few times – but this is one every apartment owner always asks, “Is now a good time to sell my apartment?”
There are quite a few answers to that question. I know it seems like a very straight forward one. But they are actually – it is not that straight forward. Because at the end of the day it is actually what is best for you being the owner. Now, there is my personal opinion on what is going to happen in the apartment market – and there is what is best for you.
These two things are completely different. For example, the best thing for you may be to sell your apartment right now because you need the money to do other things. To go on a holiday; it may be a family situation; it may be to put the money somewhere else where it is going to make more money. There are so many different situations though. In that regard, it is irrelevant to what I think is going to happen in the market. Because you are selling because it is the best thing for you.
My job is to give you all the information you need to help figure out what is best. I.e. should you auction your apartment? Should you list it with a price? How should you do it? Should you dress it? How should you market your property? Should you sell it?
If there is a window of six months. Should you sell it now? Should you sell it in six months? If it is a hotel lease, should you wait until you get it out of the pool? Or should you keep it in the pool? All these kind of questions.
Then there is a second question: Should I sell my apartment now? Now that is where I say – Okay, if it was my apartment, and there was none of these other factors, that is when it is very different.
My personal opinion is that there is still more in this market to go. We are still always moving but the thing is – the apartment market is a very different one. It is one that actually does not hit you hard on the back of the housing market. It rides on supply and demand. If there is a lot of apartments available, the price goes down. It is all about the developments.
As you know, the developers are selling off the plans again – which means there is going to be new apartments coming to the market. They are not there yet. They have not been bought yet. I know they are being planned to be built. So I would not sell now. I will probably wait a while. Wait until you start seeing the cranes in the sky. Then I would assess the situation. And then look at – okay, maybe it is time to accept. Or maybe you want a lot – you want to talk long, long, long term.
It all depends on the purpose of your purchase. If it is just for income and you do not care about capital gain then it does not matter. Unless if it’s going to affect he rental situation for example; if you have all of a sudden, had a flood in your apartment, well that could lower the rent. It is a big, big question that cannot really be answered in general terms. That is something that is very specific to the particular person’s situation, the particular person’s goal with their investment, and the particular person’s apartment.
For example, there could be a development going on in front, in a couple of years it could lose its view. That would be advantageous if capital gain was the sole reason for you to sell now. The answer is – I cannot give you an answer. But it all comes down to you being a specific owner, and me giving you the information to help you figure out what is best for you, and you making that decision. Lovely. Cool.
Next week, we will talk about – you are going to sell your apartment, but you have got tenants. How are they going to be affected? Are they going to be affected? Will they move out? It is something that is a concern of most people when they are going to sell – what do they do with tenants. I will cover that very briefly and then how we look at it.
When renting your Auckland apartment, there are factors that you have to consider like apartment presentation, terms and duration of rent and who your tenants will be. It is important to get it right so that you raise the value of the rent thereby raising the value of your apartment.
Andrew Murray from Apartment Specialists. Renting your Auckland apartment.
Now, this is done so badly in this industry. It is done badly by rental agents and people who are actually renting privately. And that is really, really, frustrating for me because when I come to sell an apartment that was under rented it effects the value hugely.
Now I don’t just mean if you’ve got a shoe box apartment or your apartment is a student apartment – or even if it’s an owner-occupier apartment or a very large apartment. Because if the rent is not getting – not what it should be – then I have to fix the value. I have a lot of international buyers who still buy very, very large apartments. And there are one or two who are looking for a capital gain. They are looking for all kinds of criteria that are different. And the returns they expect are so much different than the local market.
So there are still methods across the board. So what can – how can – I was thinking how can I help you guys sort of – give you a few tips in regards to getting this right. Now first of all, there are some things you would not actually think affects renting your apartment. A big thing is – a big misconception – is that you’ve got to furnish your apartment. Most owners think – it is better that you have your apartment with no furniture because most tenants turn up with their furniture. That is not actually the case.
There are so many international people – people from different cultures – you’ve got people who are just not going to lag around bringing furniture up to the 14th floor or 4th floor or where ever the apartment may be. What if the furniture does not fit in the apartment? A furnished apartment always gets more rent. And it always increases the value of the apartment.
Now I don’t mean you’ve got to buy the best of the best. You buy something that looks good. You can do a Kmart or Warehouse job. They have great and very durable furniture in there. I wished we had Ikea here – it would be perfect. When I went to the States and Australia that’s what they all use.
Furnish your apartment. It’s all about presentation. Get a professional photographer. Even if your rental agent doesn’t suggest this, you suggest it. There’s a guy I can use, flip me an email. It will cost you about $150 to 230 plus GST which is virtually nothing. It will put your apartment above all the rest.
The third one is how you rent your apartment at the time of the year. Okay, you want to be renting your apartment – if you can – for a year, from the time it is at the peak. So for example your peak rental period is the end of January through to the end of march. So you want to be renting your apartment each year at that time. If not, you know – have a long tenancy – that’s two to three years. Okay, So maybe if your apartment is out of sync with that you want maybe to fix a tenancy that matches up with that period. Maybe a four month fix now or something like that. So it comes into that period. Now that is very, very crucial. So ask your rental agent or flip me an email and I can explain it down further to you.
Now another one is your type of tenant. Now it’s not about being racist. It’s not about being you know fussy – either of those. Okay so who do you want into your apartment? Would you live with these people? Would you have them in your house as guests? And It’s not about being discriminant. It’s about who is going to look after your apartment. What demographic are you looking for? So, advertise through that demographic. So even if you are in a student complex – you can still go for a young couple – or something like that. It is all about the choices you make when looking into the applications. You don’t have to give your reasons. But make sure you do background checks. Make sure your agent does background checks. And you see those checks – so that you can make a choice for yourself.
And another one is if you are going to a rental agent, which I would advice, keep them accountable. Ask them what they do – what they do for the fee they charge you. Okay now there are so many rental agents out there. There’s hundreds of them and only a few who are really good ones. And I’ve recommended a lot of different apartment agents. Some have let me down which has been disappointing because it’s been a reflection on me. I don’t do rentals myself but I can happily refer you to some of the good ones out there. If you want me to flip me an email to firstname.lastname@example.org and I can get you in touch and give you the advice that you need. But make sure you get the right rent for your apartment not just for you – not just for me when I come to sell it – but because you should be.
Thanks for that. Next time I’ll be talking about – if you choose to sell to your apartment and you get tenants – what happens to those tenants? Are you worried that they are going to leave? Are you worried that they stop paying their rent? What happens to the sales price and what should be happening and – how would you ensure that that’s not even a concern.
How do you stage your apartment to look its absolute best online? Why is this necessary for owners who are selling their apartments? These are questions that we will answer in this series on questions asked by many apartment owners – “How Do I Sell My Apartment?”
Andrew Murray, Apartment Specialists. “How do I sell my apartment?” The question I get asked most often.
Now, it is all about having your apartment looking its absolute best online. So that is about using professional photography. And what I’m taking about today is not about you just paying for professional photography – it is having your Auckland apartment looking in its best light before the photographer gets there because otherwise it is a waste of time.
So, looking at the list of things that I’ve just come up in the last two days – rather than comparing my own and all that kind of thing – I wanted to look at two apartments that are very similar and can actually be really compared. So again here, you’ve got one in Harvard and one in Zest. They are investor apartments. They are the ones that a lot of people have difficulty with with tenants.
And now that is not an excuse. You can create a relationship with a tenant. And you will see that, as in regards to the results of professional photography. So both have used professional photography here.
Freehold, two bedrooms, the apartment in Harvard. Eleven photos. Two bedrooms, one bathroom. Two bedrooms, one bathroom. Both exactly the same size. Very similar. Both listed at exactly the same time. So you’ve got here, Freehold, two bedroom apartment, and the photography- it’s professional photography. I mean, the appearance could look better but it doesn’t look bad. It’s showing the apartment in good light. And how many views has it got? 396.
Now, we then look at Zest which is very similar. Professional photography as you can see by the wide angle lens. But the presentation is shocking to be honest. I mean, if you were an owner, would you want your apartment to look like that? If you are a buyer, what are you thinking? And this is an example where it just doesn’t create the same amount of enquiries.
So, it is about creating relationships with the tenants. It is coming in and lightly staging with them – and actually talking with them – and that’s a whole conversation in another process. But it is the result that counts. So professional photography is a must. But you are wasting your money if you are taking professional photography of something that does not look good.
So, I guess that is the point that I want to get through today. And you had probably see in the views 286. So from 286 to – how many were there before? Very quickly, my apologies. So, probably about 30% more views. So that’s 30% more buyers looking at your apartment.
Thank you for that, I will be now commenting on the third part of this question, Is it a feature or not a feature?
What is the importance of photography in Auckland apartment sales? This is something that we will go to in detail for apartment owners’ biggest question “How Do I Sell My Apartment?”
Andrew Murray, Apartment Specialists. So, I am going to ask one of questions I get asked a lot. How do I sell my apartment? What is the most important thing?
Now, what the most important thing is actually your online presence. These days, people don’t like going all around – going from apartment to apartment. They prefer to do all their research on the web. So photos are absolutely paramount.
A buyer’s got to be able to see your apartment on the net and in the best light. So that’s why professional photography is an absolute must. And if an owner does not want to do professional photography – I do not care how cheap the apartment is – I simply would not sell it. And the reason for that is because it’s doing the owner an injustice. It is making my job that much harder. And I am trying to achieve the highest price here. So if they are not willing to invest that in their apartment marketing, they should not be selling their apartment.
Anyway, so what I will do is I will just show you a brief example here.
These are listings that have been done in the last two days. I will show you the ones that were done yesterday – since it is too close to show you the difference in the amount of views and activity that having professional photos does and not having professional photos. So you can see a few of my apartment’s listings here and Barfoots – you know all the competition. Everybody here, Ray White, et cetera.
We will first start with a spacious studio. So, we are going to compare a studio here which is $275,000 and shows two photos of it. And another studio here which is $289,000 so very similar properties here. So when making a comparison, I want them to be actually comparable properties so there is no, ‘Oh, what about that?’
Okay. So let us first look at the spacious studio. Okay, it is in the Lord Nelson. It does not come up very often. It is pretty rare. And how many hits it has got? 169 views. Why? It only got two photos. When you come down as a buyer, you are going, ‘Well, I can’t see what this apartment is. Why do I need to click into it? I know the price. What else do I need to know?’ Okay, let me compare the one that does – With us forever, 289,000. Okay, you click through the photos ‘oh, that’s pretty nice. Yeah I’m going to have a closer look at that’ – and I go in and I do and it is that simple.
And the professional photography, as you can see, makes it look more like a million dollar. And this is a tenant apartment – this is it. Having tenants does not mean it’s an excuse for agents not to make the presentation good. Because you can create relationship with tenants. I go onto that later – but the views over 1000 and I go back again – over 1000.
So we’re talking about at least five times more views and that apartment was actually listed slightly before – probably, maybe an hour before this one was listed. And that is a massive difference. Professional photography is an absolute must.
Okay, the next thing I am going to be talking about when people ask me how do I sell my apartment is about not just professional photos – but the professional photos that have to be showing your apartment in the best light possible.
Cool. Thank you.
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