When investing in real estate, price differences between apartments in the same project often attract attention. Behind these differences is usually the concept of goodwill.
It is not a coincidence that some flats, especially in new housing projects, sell faster or find buyers at higher prices. Details such as floor, facade, view and location directly affect this process. Therefore, taking the goodwill factor into consideration when investing allows you to make better decisions and make a more advantageous investment in the long term.
What is Goodwill Cost?
Goodwill value is the additional value that represents the price difference between flats in the same project. This difference arises from advantages such as the floor where the flat is located, facade direction, view, sunlight or location within the site. So basically, the fact that some flats are more preferable than others is reflected in their prices.
For example, let's consider two 2+1 flats located on the same site. One is on the lower floor, on the north side, and has no view; The other one should be on the upper floor, facing south and having an open view. It is quite normal for the apartment on the upper floor to be sold for a higher price, even if the square meters are the same. This price difference is called goodwill cost. On the other hand, flats with a good location within the site are generally more valuable. For example, an apartment located in a block close to social areas but away from noise is more preferred than others. This is directly reflected in its price. In other words, the value of goodwill is shaped not only by physical features but also by details that increase the comfort of daily life.
How to Calculate Goodwill?
Goodwill is calculated based on the price difference between similar apartments in the same project. In this calculation, a less advantageous flat is usually taken as a reference and it is determined how much more valuable the other flats are compared to this reference.
For example, if the base flat is 5 million TL and an apartment on a higher floor with a view is sold for 5.5 million TL, the difference of 500 thousand TL constitutes the goodwill value. This difference is entirely due to the additional advantages the apartment offers.
Flat goodwill account while being done; In addition to physical features such as floor, facade, view, sunlight exposure, balcony, the location within the site is also evaluated. In some projects, this process proceeds more systematically and pricing is done by giving points to each flat. Thanks to this calculation, you can more easily understand which apartment is truly more advantageous. Especially when investing, it makes your job significantly easier to see whether the price difference you pay is worth the advantages it offers.
How to Use Goodwill in Real Estate Investment?
Goodwill can be used as an important filter in the investment decision to choose the right apartment. While there are many options with similar square meters in the same project, it is necessary to look at the differences in goodwill to understand which one is more advantageous. The main purpose here is to analyze whether the price difference paid actually creates value.
For example, it often makes sense to pay a higher price for an apartment with a view or on a higher floor because these features provide advantages in the sales and rental process. However, in some cases, the goodwill difference may be greater than necessary. At this point, as an investor, it is necessary to compare alternatives within the same project and look at the price-performance balance.
Especially in long-term investments, flats with high goodwill value are more advantageous in terms of demand. This means both easier renting and finding a buyer faster during sales. Generally speaking, goodwill allows you to analyze future value growth potential in addition to today's price.
How Does Goodwill Increase Affect Return on Investment?
Goodwill increase is an important factor that increases the return on investment by directly affecting both the rental and sales value of a real estate. When the flats in the same project are examined, it is seen that houses with high goodwill are sold faster and rented in a shorter time. This shortens the return on investment time.
When we look at the data, we see that flats with advantages such as views, upper floors or south facades can be priced 10-30% higher than their counterparts, and provide 5-15% higher returns on the rental side.
Let's compare it with a concrete example: Let's say you bought a standard apartment for 5 million TL and it brings a monthly rent of 20,000 TL. You bought a high-quality flat in the same project for 5.5 million TL, and this flat brings a monthly rent of 24,000 TL.
- Standard flat annual rent: 240,000 TL
- Annual rent for high goodwill apartment: 288,000 TL
The difference is 48,000 TL per year. This means approximately 20% higher returns in rental income alone. Moreover, considering that flats with high goodwill gain value faster during the sales phase, it can be thought that the total return on investment will become more advantageous over time. In this sense, the increase in goodwill will directly affect your earnings in the long term.
When investing in real estate, it is important to pay attention not only to the price but also to the details. The choices you make by taking the goodwill factor into consideration will both facilitate your leasing process and enable you to earn stronger profits in the long term. Choosing the right flat, especially in areas with high real estate values, directly affects the performance of your investment. Therefore, making goodwill analysis a part of the process helps you make a more informed and profit-oriented investment.
