June 15, 2012
A friend of mine (let’s call her Rabbita) thinks that the formula from my previous post is too complicated and difficult to implement, and I agree to a certain extent. After all, like I said, it’s really subjective how much value you put into each item on the list. For example, a nearby MRT is usually a plus, but a person who goes everywhere by car might not care if there’s an MRT station near the place, or he might even think that it’s a nuisance.
Rabbita’s suggested method is to set a budget first, and make sure the price plus renovation costs fit your budget. It’s intuitive and makes budgeting sense. Most people will probably do that if they plan to buy for their own stay. After all, buying a home is usually an emotional thing and some things just can’t be quantified.
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June 13, 2012
How do you know how much to pay for a piece of property? Do you have a method, or do you go by your gut? Oftentimes, it’s not as simple as finding out the psf data of deals done in the same project or in neighbouring projects. From unit to unit, from project to project, and area to area, there can be big differences in terms of facing, view, facilities, fittings etc. To make things worse, a lot of these criteria are subjective. So how do you determine how much is a fair price?
Here’s the step-by-step of how I generally do it:
1. First determine what is your base price. Basically the question to ask here is this: if I were to buy a property in this general area, how much would I pay per square foot? Alternatively, if you don’t really have an answer to that question, you can take a sampling of the psf prices of similar units in the same area. Doing this will help you establish a benchmark for the subsequent step.
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