Comps Question
I’m currently considering buying an apartment in a large pre-war coop. One unit I’m interested in has a 200 sq. ft. private rooftop terrace (there’s a common building terrace adjacent to the private one). Not many units have a private terrace and there are almost no comp sales in the last few years. However a…
I’m currently considering buying an apartment in a large pre-war coop. One unit I’m interested in has a 200 sq. ft. private rooftop terrace (there’s a common building terrace adjacent to the private one). Not many units have a private terrace and there are almost no comp sales in the last few years. However a number of similar apartments without terraces have been sold recently.
How much more valuable do you consider a 2 bedroom coop with a terrace vs. one without? For example if 1,000 sq. ft. units with no terraces are going for say 600/sq. ft, how much of a premium would you pay per sq. ft. for the same apartment with the 200 sq. ft. terrace?
Be extra careful that you know what your financial obligation is in the event that your terrace leaks and damages the apartment below. Different buildings have different rules about this – ask your lawyer to find out. Terraces are really nice until they start costing you a lot of money.
I have heard of two methods:
1- value of outdoor space is between 20 and 50% of the interior space, depending of access, light and finish. So if the terrace is accessible from the public rooms (living or dining room), and is fully landscaped, the value would be 200sf x $300 ($600*50%) = $60,000.
2- usable outdoor space adds 10 to 20% to the cost of the apartment, at the higher end for terraces. In this case, $600,000*1.2= $720,000.
As a buyer, I’d start with the first method.