Value of a garage and garden on a house

Ray Palmer

I was approached by neighbour of a property I own about thesale of part of the garden and garage. Effectively it is currently a semi-detachedwith a garage and the neighbour’s garage meets with that garage. The terrace ofhouses continues along with some houses have garages and some not but generallyin pairs.



The neighbour has an extension in their garden that makes itkind of small so what they want to do is buy the garage and part of the frontand back garden. Essentially making my house a terrace house but they get biggergardens and an extra garage.



Anyway the question of value comes up. What would be a fairvalue? Percentage of property value I think is a reasonable way to look at itbut the property is worth around 300k as is.



I also aware that this will give the guy the opportunity tohave a plot for a second property as the width of the two garages is roughlythat of a terrace house on the road. It is also going to be worth more to himthan anybody else.

spockety

Do you need the money?

Ray Palmer

spockety wrote: »

Do you need the money?

No. I have a kind of double interest in it as I could propose a similar deal to another neighbour on a different property. The garage and garden size would have a very limited impact on rental potential but some effect on resale.

spockety

If you don't need the money I would probably not take him up on the offer.

A garage will make your house much more sellable when the time comes.

Plus as you say he could theoretically apply for planning to put a new build on it, and make a fair bit of profit. That might annoy you a fair bit too if it came to pass.

Ray Palmer

spockety wrote: »

If you don't need the money I would probably not take him up on the offer.

A garage will make your house much more sellable when the time comes.

Plus as you say he could theoretically apply for planning to put a new build on it, and make a fair bit of profit. That might annoy you a fair bit too if it came to pass.

Lets just take it that I am interested in doing it and I just want to get an idea on how people would see a fair valuation would be done.

The garages are kind of small and you can't really fit a modern car in them. I would say it would be difficult to park an old mini in it and open the door.

D3PO

Id agree with spokety if your not badly in need of the money I wouldn't do it ther downsides are large and the upside isn't fantastic.

I might be wrong aswell but if they bought your garage they essentially own the property from the ground up so essentially they could build ontop of the garage in future / you couldn't if that was something you were thinking about.

Regarding how much is it worth. Id say its worth what they are willing to pay and what your willing to accept. I don't think you can apply some kind of logic to it as its such a unique selling position.

again I think its a really really bad idea best do swerve it completely imo,.

pedantic as it is its also only terraces if a roofline is shared so the houses aren't terraced just because they have adjoining garages. Sorry had to get that off my chest

spockety

Ok in that case I would value it like so:

1) Get the total value of property (land + buildings)

2) Get total rebuild cost of property

3) Use Garage as % overall of floor area to calculate garage rebuild value.

4) Subtract total rebuild cost of property from total value of property to give land value.

5) Ascertain % footprint of land being given to neighbour in deal, and use that % to derive the value of that strip of land.

Garage value = Garage Land Footprint Value + Garage Rebuild Cost

You could also then add on an additional premium for unquantifiable costs of having a garage per se.

Ray Palmer

spockety wrote: »

Ok in that case I would value it like so:

1) Get the total value of property (land + buildings)

2) Get total rebuild cost of property

3) Use Garage as % overall of floor area to calculate garage rebuild value.

4) Subtract total rebuild cost of property from total value of property to give land value.

5) Ascertain % footprint of land being given to neighbour in deal, and use that % to derive the value of that strip of land.

Garage value = Garage Land Footprint Value + Garage Rebuild Cost

You could also then add on an additional premium for unquantifiable costs of having a garage per se.

I see where you are coming from but you aren't really considering value it puts on the property. Rebuild cost also isn't a great indicator of value as they won't be rebuilding the garage and will not have another place to put it.

As for the upsides for me it is kind of simple if I can get the other neighbour to agree. I have a plot that suits me and don't have to deal with the useless leaking garage that tenants often dump stuff in which I end up disposing of.

If it was my own home I certainly wouldn't want it but as a rented property it means little to me and that is the same with the LL of the other house I would like a similar deal on.

The main thing is the LL beside me hasn't invested money in the property and I am unlikely to do anything with the garage I have either. If he does build on it afterwards it doesn't bother me and fair play if he makes money off it. Better to have another property in the area than two unused garages. I also doubt he would do it for many years, Most likely thing would be to change his garage into a room then use the other garage.

Muahahaha

I don't know exactly how you would put a price on the garage but I know from a surveyor friend that in situations like the one your neighbour is in he is known in the valuation business as a 'special purchaser', I.e. the value of the garage to him is above and beyond its actual market value and therefore a premium asking price is the norm in that scenario. Its a bit like a farmer who gets the opportunity to buy some of a neighbouring farms land that already connects his own land, as it makes his overall holding bigger without dividing it the valuation therefore attracts a higher price.

Santa Cruz

Get an architect around and ask him to give you a few options as to what you could do with the space or what your neighbour might do.

Ray Palmer

Santa Cruz wrote: »

Get an architect around and ask him to give you a few options as to what you could do with the space or what your neighbour might do.

I think people are too preoccupied with what he will do. I don't care it won't effect me in any real sense as I don't live there. If I was concerned I would get that written into the contract of sale.

Architects are not any use on such things. Be like hiring a brain surgeon to give an assessment on a cold. I know enough to figure out what he could build.

BnB

I don't think you should be looking at what he can do, what size it is etc...

I think, it comes down to a simple question, what will your property be worth at the end of the transaction. i.e. as a Terraced property, with a smaller garden what will it's new value be ? I think from your first post that there are already terraced properties on the road. Have any of them sold lately, and if so, what did they make.

Substitute the value of a terraced house, from the €300k you say it's currently worth, and you have the "value" of the garage

Valentine1

I would start by working out the amount that it might reduce the potential sale value of your property and work from there.

If your property is worth €300k but without the garage and garden might only sell for €200k you'd want to off set as much of that potential loss as possible. I would also suggest that it is important to consider his intentions as it may give you an indication as to the amount he may be willing to pay. if h just wants it to build a decent size car port he won't pay much but if he is planning to build an entirely new house he will be prepared to stretch much further.

Ray Palmer

BnB wrote: »

I don't think you should be looking at what he can do, what size it is etc...

I think, it comes down to a simple question, what will your property be worth at the end of the transaction. i.e. as a Terraced property, with a smaller garden what will it's new value be ? I think from your first post that there are already terraced properties on the road. Have any of them sold lately, and if so, what did they make.

Substitute the value of a terraced house, from the €300k you say it's currently worth, and you have the "value" of the garage

Unfortunately that valuation won’t work. The difference insale prices varies a great deal (80k) on the condition of the property regardlessof whether terrace property or garaged. The gardens aren’t standard sizeseither as they were built based on the original layout of the field. Theproperty I have is probably worth more than others as it has been kept up todate with modern kitchen ,heating, double glazing, insulation etc…



The rental property beside the other property has not beenkept up with developments. Singleglazed, no central heating, E2 BER etc… Basically my property is at the top ofthe bracket for price where the one I would like to buy from is at the lowerend. I also have a converted attic which would increase the value of both myproperties.
It is difficult to work out what you would lose in a sale, consider the benefit to the other party and the long term effect on the property value.

Ideally I would love to get my neighbours garage/garden and have the rental property garage sale pay more.

Being fair I would like to use the same calculation on both so what seems fair to me and they guy I want to buy off should be fair to the guy I sell to.

BnB

Ray Palmer wrote: »

Unfortunately that valuation won’t work. The difference insale prices varies a great deal (80k) on the condition of the property regardlessof whether terrace property or garaged. The gardens aren’t standard sizeseither as they were built based on the original layout of the field. Theproperty I have is probably worth more than others as it has been kept up todate with modern kitchen ,heating, double glazing, insulation etc…



The rental property beside the other property has not beenkept up with developments. Singleglazed, no central heating, E2 BER etc… Basically my property is at the top ofthe bracket for price where the one I would like to buy from is at the lowerend. I also have a converted attic which would increase the value of both myproperties.
It is difficult to work out what you would lose in a sale, consider the benefit to the other party and the long term effect on the property value.

Ideally I would love to get my neighbours garage/garden and have the rental property garage sale pay more.

Being fair I would like to use the same calculation on both so what seems fair to me and they guy I want to buy off should be fair to the guy I sell to.

I hear what you are saying RE the difficulty in valuing your house post garage sale. But if you are looking for a "formula" (as such) it is kind of the only way to do it. You have to make some kind of an educated guess at what the new reduced value would be and ensure that you are covering this.

Ultimately though, I think what Muahahaha said above is right. I don't think there is any formula you can apply to both situations. Because, the biggest factor in both cases is how badly the neighbor in the first property wants your garage, and how eager the neighbor in the 2nd property is to sell.

I would ask the guy who wants to buy first to make you an offer. That would give you a starting point (and might also let you know how serious he is)

handlemaster

the neighbour wants something off of you that he cannot ever get off someone else unless you sell the house in the future. Tell him you were not interested in selling but seen that he has approached you how much is he willing to offer. Take it from there then. I wouldnt give a price to him it will only be a stick to beat you with. It shows you are interested and then gives him something to come against.

ted1

Ray Palmer wrote: »

Lets just take it that I am interested in doing it and I just want to get an idea on how people would see a fair valuation would be done.

The garages are kind of small and you can't really fit a modern car in them. I would say it would be difficult to park an old mini in it and open the door.

Whole you may make a short term gain it would certainly devalue your house and limit any extensions

Muahahaha

Don't forget as well that you could likely have a liability to capital gains tax at 33% as it is not your PPR

jeepers101

What about putting one neighbour in touch with the other. Let them haggle prices and do the deal, the end result being one of your properties decreases in size, the other increases.

Limited hassle for you.

Marcusm

Ray Palmer wrote: »

I think people are too preoccupied with what he will do. I don't care it won't effect me in any real sense as I don't live there. If I was concerned I would get that written into the contract of sale.

Architects are not any use on such things. Be like hiring a brain surgeon to give an assessment on a cold. I know enough to figure out what he could build.

The max value available is probably if he built a house on the site ofthe two garages so I would look at the selling price of that house minus construction costs and look for 1/4-1/3 of that value.

the_syco

Ray Palmer wrote: »

I think people are too preoccupied with what he will do.

The bigger his plans, the more he'll pay, imo.