Property Values
Property Values in San Francisco Are Determined by Many Factors
A property’s location, rental income, size, tenant profile, sales comparables, market conditions, property condition, and curb appeal are all vital factors to consider when determining current market price. Your property should be priced at a fair market value to entice the most potential buyers. Pricing your property correctly will ideally attract multiple offers, a high sales price, and the best contract terms possible.
Items to Consider
LOCATION:
San Francisco is a city that draws people from all over the world. Each neighborhood has a unique character that attracts buyers, renters, and investors alike. If your property is located in a desirable location, you can anticipate earning higher rental income and value from your building.
PROPERTY SIZE:
The larger the property, the higher the value. One should consider the Price per Square Foot to compare property values. Investors will use this data to compare potential real estate investments. Of note: buildings with owner-use opportunities or low rental income can skew the results of these calculations. Two factors determine whether a property’s price per square foot will deviate from current comparables: notable advantage/disadvantage and drastic changes in the market. Price per Unit shoudl be viewed as a representation of potential rental income.
COMPARABLES:
A property’s location, size, and other factors should be compared to other nearby recent sales. Some properties may have many comparables, whereas others may not be as numerous. Every property represents a unique opportunity for valuation with a varied set of factors. Pricing using comparables may vary. If a price is significantly higher or lower than the comparables in the area, the property value should be accounted for by another significant characteristic.
MARKET CONDITIONS:
San Francisco market conditions are in a constant state of flux and should always be taken into consideration when determining property value.
PROPERTY CONDITION:
The better your property condition and curb appeal, the higher the price you can request. To improve your property condition, consider cleaning your building to increase marketability. Some properties can be listed “as-is” whereas others should be improved prior to listing. Adding value through improvements can greatly influence the eventual sales price. Power washing, new paint (both interior and exterior), replacing worn carpeting, carpet cleaning, and improving your landscaping can make a huge difference.
COMPETITION:
The current inventory on the market also affects property values. The total number and quality of properties currently listed are factors to consider. Increasing demand for investment real estate in San Francisco and a lack of inventory overall has increased prices considerably over time.