General question about the importance of cost per square foot

[JimJones_IHB]

Just a general question for those who are knowledgeable about Real Estate. I have a friend who is looking at Condos for whom cost per square foot seems to be the most important factor in his choice of units. As an example he is comparing the cost per square foot between two similarily priced units. units. The larger unit (1900 sf) unit has inexpensive wall to wall carpeting throughtout, very small kitchen and bath that are both finished with what appears to be Home depot quality materials. The second unit (1600 sf) has real hardwoods on the main floor, large kitchen and very high end finishes in baths, kitchen and throughout.



Are there other folks out there that ignore stuff like small kitchens and low grade materials and only focus on cost per square foot as the most important aspect when making a purchase on a unit they intend to reside in? Just wondering if this is a common way of looking at a purchase like this.

 

[meme_IHB]

The probably obvious answer: both things are important. People want square footage, they also want higher end materials and they want the place to be structured in whatever way they like best (large kitchen, for example).



Your friend's way of focusing so strongly on square footage may be a bit unusual, but in the long run perhaps he'll save money because of it. What is in style today may not be in 5 or 10 years, and today's styles and "high end" finishes may be undesirable by the time he goes to sell. 1900 square feet will still be 1900 square feet, long after everyone has decided that they no longer like granite countertops and stainless steel appliances.

 

[JimJones_IHB]

[quote author="meme" date=1243912255]The probably obvious answer: both things are important. People want square footage, they also want higher end materials and they want the place to be structured in whatever way they like best (large kitchen, for example).



Your friend's way of focusing so strongly on square footage may be a bit unusual, but in the long run perhaps he'll save money because of it. What is in style today may not be in 5 or 10 years, and today's styles and "high end" finishes may be undesirable by the time he goes to sell. 1900 square feet will still be 1900 square feet, long after everyone has decided that they no longer like granite countertops and stainless steel appliances.</blockquote>


Ya good point.



But I personally saw the first unit and then saw multiple pics online of the second unit. The differences in quality and layout were pretty breathtaking. To my mind his approach would make more sense if you were buying or leasing office space. To me comparing square footage between two units that are not of similar quality and desired layout doesn't make a lot of sense.

 

[gypsyuma_IHB]

I am also no expert, but this is my two cents. I went to look at two townhouses recently that were the exact same floor plan. One of them had not been updated at all, and it was evident. The other had been updated cosmetically - meaning the entire place had been painted, new carpet, etc.... The updated one was $790k. The one that had not been cosmetically enhanced was $725k. But really, how much does paint and carpet cost? Now imagine if the one that had been cosmetically enhanced was actually smaller than the other.



I think the point is that it is silly to pay a premium for a smaller place simply because the owner knows how to stage his place for maximum value. Alot of people fall for that ploy, which is why the price per square foot can be so compelling. Should you pay a bit extra for a place that is move in ready? Sure. But should you pay a $65,000 premium for some paint and carpet worth less than $5,000?



The smart buyer would take the cheaper place and be the one to enhance it and cash in - because there are always the suckers that will pay the huge premium for good staging. I have done it many times and it works.

 

[Stuff It_IHB]

[quote author="gypsyuma" date=1243921519]I am also no expert, but this is my two cents. I went to look at two townhouses recently that were the exact same floor plan. One of them had not been updated at all, and it was evident. The other had been updated cosmetically - meaning the entire place had been painted, new carpet, etc.... The updated one was $790k. The one that had not been cosmetically enhanced was $725k. But really, how much does paint and carpet cost? Now imagine if the one that had been cosmetically enhanced was actually smaller than the other.



I think the point is that it is silly to pay a premium for a smaller place simply because the owner knows how to stage his place for maximum value. Alot of people fall for that ploy, which is why the price per square foot can be so compelling. Should you pay a bit extra for a place that is move in ready? Sure. But should you pay a $65,000 premium for some paint and carpet worth less than $5,000?



The smart buyer would take the cheaper place and be the one to enhance it and cash in - because there are always the suckers that will pay the huge premium for good staging. I have done it many times and it works.</blockquote>


I would have to go for the cheaper square foot. When/if I buy a house I would like to customise it for my tastes. I don't want to have to pay for what someone else likes since their tastes and mine are unlikely to match

 

[freedomCM_IHB]

i would go for the good floor plan. pretty hard to do major renovations, like moving walls and kitchens or bathrooms, on a condo.

 

[Geotpf_IHB]

[quote author="freedomCM" date=1243936024]i would go for the good floor plan. pretty hard to do major renovations, like moving walls and kitchens or bathrooms, on a condo.</blockquote>


Very good point. On a house, you can move walls or even potentially add on to the existing structure. In a condo, you can't.