If you are thinking of buying a condo as part of your retirement plan, this column in as must read for you. Whether you are a retiree or a first time home buyer, or you want it as part of your retirement plan, the price per square foot is a good rule of thumb to compare several homes you may be previewing. Once you see a difference in the price per square foot – you need to determine WHY there is a difference and if the difference is justified. A good retirement plan is well balanced, but in my book your retirement plan should always include real estate.
When you want to look at square footage, be sure to look at the following:
- The air-conditioned square footage of the condo. This is pretty simple. This calculation does not include the balconies, porches, or garage. When you are comparing buildings, make sure you compare price per square foot on similar size homes at the same levels and with similar views. It is a good idea to compare the mid-priced unit in one offering with the mid price unit in the other. Also keep in mind that if one home has one kitchen and two baths but has half the floor space as another home with the same type kitchen and two baths – the smaller unit is going to be more money per square foot. Kitchens and baths are more expensive. Therefore smaller units may have a lower price point, but be more expensive per square foot.
- The ratio of square footage in that condo that you own versus that of the entire condo project. It stands to reason that if there is a large number of square feet that the developer cannot sell, (Hallways, elevators, stairs, and amenities like boat ramps, tennis courts, exercise rooms, boat storage) the price that he must charge for SELLABLE space will be higher. A low ratio of sellable space to the space built makes for a more inefficient design.
- The extras that the price per square foot does not take into consideration. Is there golf? Work out rooms? Gates? Water? How much land does the community sit on? Is it tightly packed? If you compare one condo on the golf course with one on the river, you will not get a fair comparison.
- The quality upgrades within the unit. The standard features are built to a certain level of finish. One standard might call for solid surface counter tops another might call for granite or mica. We call this the finishes. Make sure you compare counter tops, appliances, grade of windows, flooring, crown molding, closet build outs, and other built ins. Find out what the standard finish is before you compare
Today I would like to spend more time on these quality upgrades of the construction, the site work and materials used, and give you some things to look for beyond square footage price. I have seen too many projects today that have sacrificed quality in order to meet certain price points. Then the developer decorates a model in such a way that you spend more time looking at the high end furnishings rather than the home itself.
By the way, I think it is flat out wrong for a buyer settle for lower quality just to meet a price point. I would rather see you sacrifice size. Remember that quality endures. Quality is an investment that will pay dividends.
What follows if a partial check list of items to CONSIDER when looking at a new home or condominium. To help you, have your agent make a checklist for you when comparing homes.
Driveway/Parking: Is there enough outside parking for guests?
Garage: Wide enough for cars? Extra Storage?
Setback: How far are you from your neighbor?
Drainage: If possible visit during a rain. Are there gutters on the roof?
Soffets: Are they wood, aluminum or wire with stucco?
Roof: Tile or asphalt?
Doors and Windows: Impact or not? Shutters of not? Doorways covered from rain? Tinted? Screens? How easy are they to clean?
Lighting: Is it where you will need it?
Garbage receptacles: Are they hidden? Convenient?
Hose Bibs: Where you need them?
Location of Air Conditioning Compressor: Consider noise and appearance.
Walkways: Width, type, landscaping.
Some of these items you will not be able to see – but are important none the less.
Insulation: Are any interior walls insulated for sound? What about drain chases?
Plumbing: Are there shutoffs where you need them? Compare quality of fixtures. Under mount sinks?
Paint quality: Lower quality homes are spray painted all one color.
Doors: Hollow or solid? Did they paint the hinges?
Closets: Finished interior, plastic clad wire or wood? Lighted or not?
Trim: Look at the quality of the wood. Is the trim actually wood or a composite? (Composites may swell in humidity). Lower quality homes have little or no trim.
Design: Poorly designed homes make poor use of the square footage you pay for. Look for efficient layouts; good traffic flow and properly placed doors and closets. Where will you place your furniture? Will it fit?
Lighting: Look over the counters and work areas.. Look for overhead, switched lighting or at least plates where you can add your own in all the living areas.
Cabinets: Look carefully at the drawers and sides of exposed cabinets. Look for high cabinets in high ceiling rooms. Make sure the finishes match.
Flooring: Are all wet areas tiles or vinyl?
Look in less obvious places for quality: in closets, behind doors, in the utility room.
You may think because you are purchasing new, there is no need for a home inspection, but I would encourage you to have a qualified home inspector prepare a review of your new home purchase. He can provide you with a punch out list that you can give the builder.
Price per square foot is just a starting point and a basis for further investigation. A good real estate agent can help you with your retirement planning and help you make your comparisons.