Apartments are becoming more affordable than single-family homes, and approximately 17% of Americans live in either an apartment or a condo. If you're eager to become a homeowner and would like to invest in a smaller space, apartments are perfect. Making an offer on an apartment can be difficult, as each unit has its own going price. On top of having to get your unit appraised by a professional, here are 3 ways that you can use to gauge the value of your unit and whether your offer is reasonable or not.
Take a Look at the Price of Apartments that Have Been Sold on Other Floors
One of the easiest ways to tell how much the apartment that you are eyeing is worth is to look at the going price for other apartments that have been sold on the same floor and on other floors. In general, the higher the floor that the apartment is on, the more expensive it is. If a unit sold several floors above the unit that you are interested in, you can expect your unit to be valued under that price. Similarly, the opposite is also true. If the unit you're interested in is on a floor higher than a unit that has been sold, it will have a higher appraised value.
Consider the Unit's Size and the Direction it's Facing
The floor the unit is on is not the only factor that determines the price of the unit. The size of the unit in square feet, along with the direction the windows are facing, should also be taken into account. A larger unit will naturally go for a higher price. Additionally, it's important to note that a unit that faces the sun when it sets or rises will tend to also be worth less, as these units tend to get warmer than their surrounding counterparts. Additionally, if the windows are facing a busy street, the unit may be worth less, as it may be a noisier place to live in.
Consider Inflation and Trends in the Real Estate Market
If a unit hasn't sold in the apartment complex for some time, then you'll also need to factor in the cost of inflation and look at trends in the real estate market to determine what the unit might be worth. If the real estate market is hot and apartments are claimed the moment that they are listed, you can expect the value of the unit to be considerably higher than what it might have been worth in the past. Keep in mind that you will be competing with other potential buyers when putting in an offer.
If you're a first time homeowner or if you have a small family, an apartment is a great place to start. Apartment prices tend to be much more affordable than single-family homes. Plus, the value of the apartment will usually continue to rise with the real estate market, making it a worthwhile investment for the future.