Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Y
I think what you're saying is that even though the land has fulfilled its purpose (been built), you are claiming it does not have value because it cannot be rebuilt. But: 1) it can - you just need all other condo owners and the HOA to agree to it, but it can be done. 2) It still hold value because your definition of value is not how investors around the world defines value.
That will never, ever happen. You will never get all 50 or 100 owners of a condo building to tear down the entire building and agree to build another specific designed building on top of the land. I doubt that's ever happened.
Quote:
Originally Posted by beb0p
Essentially, you are claiming that condo land does not have value because being part owner means you cannot make decision on that land on your own.
Can I tear down my condo unit and build a tiny house on top of the 1/50th part of the land that I own? No, I cannot. So where's the value in owning that land?
Quote:
Originally Posted by beb0p
But you have no issue side-stepping this condition when it applies to gold - you cannot cut off the 1/10 share of a gold bar unless all other owners agree to let you. In fact, you cannot do anything with that 1/10 gold you own without the other owners agreeing to it. It's possible the agreement doesn't even allow you to hold that gold in your hand and look at it.
.
Of course you can cut off 1/10th of a gold bar. You can cut that gold bar into 10 equal pieces and give each piece to the 10 different owners. Gold is valued by weight. You cannot do that with your 1/50th ownership of the land underneath a condo building.
Can I tear down my condo unit and build a tiny house on top of the 1/50th part of the land that I own? No, I cannot. So where's the value in owning that land?
The value is in the location and rarity. Not everything that's valuable is valuable because you can take it and do something physically with it.
The reason the condo is valuable (and has increasing value) is that we, as a society, see value in the location of that condo. And as time goes by, as more and more land is built upon, and as population increases further (making commutes hard/more difficult from further away), the value of that condo will likely go up as we (as a society, again) find value in that location.
It's not valuable because of the land it sits on, per se (as in ones ability to do something with that land). But rather the location of that building (i.e. the location of the land on which the building is built). Although if you want to get technical here - yes you could tear that building down - but, as you point out, that isn't something that's easy nor is it likely to happen to most buildings since you'll need to convince all other owners that it's worth doing...
Nonetheless, that doesn't change the reasoning for why that building is valuable to begin with.
Some things you can break up into pieces and give to part owners...and some thigns you can't (or if you did, they'd be useless). You can have part ownership of a car, but you can go rip that car to pieces and give a piece to each owner...obviously.
Now you'll say "why does a condo go up and a car goes down?" Well, this question comes back to location and rarity. We aren't making new San Francisco's...that land that the condo is on is not being remade like new cars are being created constantly.
You should also realize that housing does not have to go up always...it's possible for real estate to lose value. It just doesn't happen often in SF because we, as a society, value the location of SF. Demand exceeds supply. And since we're not building enough housing to keep up with demand, this imbalance will likely remain for a long time.
Now, you can argue all day about that value and whether it's overvalued (I feel most SF condos are overvalued for what you're getting) - but that doesn't change the underlying economical principles that give that unit its value to begin with. It's not some arbitrary thing - there's a process behind defining its value.
Last edited by HockeyMac18; 04-13-2016 at 04:01 PM..
The value is in the location and rarity. Not everything that's valuable is valuable because you can take it and do something physically with it.
The reason the condo is valuable (and has increasing value) is that we, as a society, see value in the location of that condo. And as time goes by, as more and more land is built upon, and as population increases further (making commutes hard/more difficult from further away), the value of that condo will likely go up as we (as a society, again) find value in that location.
It's not valuable because of the land it sits on, per se (as in ones ability to do something with that land). But rather the location of that building (i.e. the location of the land on which the building is built). Although if you want to get technical here - yes you could tear that building down - but, as you point out, that isn't something that's easy nor is it likely to happen to most buildings since you'll need to convince all other owners that it's worth doing...
Nonetheless, that doesn't change the reasoning for why that building is valuable to begin with.
The thing is, an old, dilapidated, outdated, condemned, unlivable single family house still has value because people will buy it as a tear down for the land to build a new house on. That's why you see unlivable old shacks in Palo Alto being sold for $2 million dollars. They are tear downs.
However, an old, dilapidated, outdated, condemned, unlivable condo unit shouldn't have much value because you cannot just tear down your unit in a 50-unit building and build a brand new unit on your 1/50th share of the land to replace it. And if you cannot live in a condo unit, what value does it have?
The thing is, an old, dilapidated, outdated, condemned, unlivable single family house still has value because people will buy it as a tear down for the land to build a new house on. That's why you see unlivable old shacks in Palo Alto being sold for $2 million dollars. They are tear downs.
However, an old, dilapidated, outdated, condemned, unlivable condo unit shouldn't have much value because you cannot just tear down your unit in a 50-unit building and build a brand new unit on your 1/50th share of the land to replace it. And if you cannot live in a condo unit, what value does it have?
I think you would actually find that an old and outdated condo will be worth far less than a condo that is updated and livable (and perhaps in the same building).
Why does it have value? Again, location...and it might not be a "tear down" but someone might see it as a cheap investment into an otherwise expensive building (perhaps that person could afford the dilapidated unit, but couldn't afford an updated unit). They'd then probably rebuild it from scratch (or as much from scratch as possible - basically redoing the entire interior).
I have friends that did just this in Oakland. They actually bought a 4 unit building - all of the units were in very poor condition (and were occupied at time of purchase). One of the tenants wanted to move out, so when the purchase went through, my friends moved into that unit.
It was in terrible shape...it took months, but they rebuilt it entirely. You wouldn't realize it was the same unit if looking at before/after photos. There's no way my friends could have afforded a nice/new/updated building - but because it was older and rundown, they could buy it. Their long-term goal is to redo each unit as the tenants move out, overtime updating the entire building.
The value is still there because the location is, at the end of the day, the main driver of the value. If the condo is dilapidated and unlivable and located in the middle of nowhere, it probably would not be worth very much. But the problem is the condo in your scenario is located in SF - and that is going to give it value regardless of condition.
That will never, ever happen. You will never get all 50 or 100 owners of a condo building to tear down the entire building and agree to build another specific designed building on top of the land. I doubt that's ever happened.
You doubt that's ever happened??
First of all, you don't know that. Second, so what! See below.
Quote:
Originally Posted by TheGreatCurve
Can I tear down my condo unit and build a tiny house on top of the 1/50th part of the land that I own? No, I cannot. So where's the value in owning that land?
Can you convince all owners of a gold bar to agree to melt the thing and turn it into a necklace? Even if the answer is no, that doesn't mean the ownership has no value.
Quote:
Originally Posted by TheGreatCurve
Of course you can cut off 1/10th of a gold bar. You can cut that gold bar into 10 equal pieces and give each piece to the 10 different owners. Gold is valued by weight. You cannot do that with your 1/50th ownership of the land underneath a condo building.
So you are just assuming all the other owners are going to go along with you?! What if the bar has historical value (say an ancient artifact) and removing 1/10 of it would destroy part of ancient history? What if the GOA (Gold Owner Association) has a bylaw against that? What if all the other owners want to preserve the aesthetic of that bar? What if the storage facility of the gold requires the bar to be of a certain weight and removing your part would drop it below requirement? What if they just don't want to?
So using your logic, if all the owners don't play ball with you removing your 1/10 gold (aka you cannot do what you want to do), then your ownership share is worthless?!
The gold bar analogy is just an example. We can sub it for a painting. What if a person owns a 1/10 share in a Van Gogh painting and that person cannot for the life of him, convince other owners to just it as a meal tray, or to anything with it but to store it in a safe? What if the person can't even take it out and look at it? Does that means the 1/10 ownership is worthless?
Additionally, you don't seem to be cognizant that even single family homes can have ownership shares (it's called Tenants in Common). A person having a 10% TIC share in a single family home is spiritually similar to a condo owner who owns one unit in a 10-unit complex. Are you also saying that a TIC ownership of a single family home also has no value?
.
First of all, you don't know that. Second, so what! See below.
Can you convince all owners of a gold bar to agree to melt the thing and turn it into a necklace? Even if the answer is no, that doesn't mean the ownership has no value.
So you are just assuming all the other owners are going to go along with you?! What if the bar has historical value (say an ancient artifact) and removing 1/10 of it would destroy part of ancient history? What if the GOA (Gold Owner Association) has a bylaw against that? What if all the other owners want to preserve the aesthetic of that bar? What if the storage facility of the gold requires the bar to be of a certain weight and removing your part would drop it below requirement? What if they just don't want to?
So using your logic, if all the owners don't play ball with you removing your 1/10 gold (aka you cannot do what you want to do), then your ownership share is worthless?!
The gold bar analogy is just an example. We can sub it for a painting. What if a person owns a 1/10 share in a Van Gogh painting and that person cannot for the life of him, convince other owners to just it as a meal tray, or to anything with it but to store it in a safe? What if the person can't even take it out and look at it? Does that means the 1/10 ownership is worthless?
Additionally, you don't seem to be cognizant that even single family homes can have ownership shares (it's called Tenants in Common). A person having a 10% TIC share in a single family home is spiritually similar to a condo owner who owns one unit in a 10-unit complex. Are you also saying that a TIC ownership of a single family home also has no value?
.
I thought we were talking about a standard gold bar, as in:
Have you ever seen 100 condo owners in the same building all agree to move out at the same time so that their condos can be razed and then all agree on a new specific design of new building to be built? Heck, even those apartment buildings in Pacifica that are about to fall off of the cliffs into the Pacific Ocean and they still can't convince all of the residents to move out!
And the land underneath a TIC building that no one can live in but also cannot be torn down has very little value.
I thought we were talking about a standard gold bar, as in:
Have you ever seen 100 condo owners in the same building all agree to move out at the same time so that their condos can be razed and then all agree on a new specific design of new building to be built? Heck, even those apartment buildings in Pacifica that are about to fall off of the cliffs into the Pacific Ocean and they still can't convince all of the residents to move out!
And the land underneath a TIC building that no one can live in but also cannot be torn down has very little value.
The thing is, it's not just the land that has value. It's the actual condo and its location.
Being in SF will always give a condo some intrinsic value. Even if it's completely dilapidated and unlivable, it will have some inherit value because it is in SF. A new owner can come in and completely rebuild the condo to either live in or rent it out.
That is the value!
Last edited by HockeyMac18; 04-14-2016 at 05:14 PM..
I thought we were talking about a standard gold bar, as in:
Doesn't matter. If other owners don't allow you to cut off your 1/10 share then you'd consider that share completely worthless? That's what you're arguing.
Quote:
Originally Posted by TheGreatCurve
Have you ever seen 100 condo owners in the same building all agree to move out at the same time so that their condos can be razed and then all agree on a new specific design of new building to be built? Heck, even those apartment buildings in Pacifica that are about to fall off of the cliffs into the Pacific Ocean and they still can't convince all of the residents to move out!
Irrelevant. Doesn't matter if there are two or 100 condo owners in the complex, the point is still the same.
Quote:
Originally Posted by TheGreatCurve
And the land underneath a TIC building that no one can live in but also cannot be torn down has very little value.
Which is not supported by facts.
.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
