Investing in a Manhattan penthouse apartment
Posted by Wei Min Tan on September 13, 2020
A Manhattan penthouse apartment is one of the world’s ultimate status symbols. Pressing the PH button in the elevator comes with a special feeling. For the world’s wealthy, buying a penthouse apartment in Manhattan is also a way to diversify assets. Why penthouse? Because the supply is limited and presumably, prices will be less volatile.
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Benefits of a penthouse apartment
Penthouse buyers who live in the apartment benefit from the many perks of being on top of the building. These perks include the best all-around views, abundance of light from the views, outdoor space, high ceilings and often, elevators that open directly into the apartment. The building staff pay special attention to the penthouse owners and there are various other “soft” perks as well. Developers always have the best features for the penthouse unit as they sell for the highest price per sqft.
Buyers who live there vs those buying as their 3rd or even fifth vacation property
Most penthouse buyers live in the apartment. But given the cache of penthouses as an investment vehicle, many penthouses are owned by people who don’t live there. This is common in luxury condo buildings. In a luxury condo building, the owner of the penthouse unit may have it as a vacation home or simply to park money as a means of asset diversification. The more expensive and globally known the condo building, the higher the likelihood that the penthouse owner will never be there.
Weimin’s article, How to invest in Manhattan property
Pressing the PH button
There is a social play in an elevator, when residents in the elevator press their floor number. The PH button is hence the ultimate button to press. It’s the sign telling others that this is the person, aka the rich one. However, pressing the PH button also means the elevator is always local. Local vs Express is NYC subway talk . A local train stops at every stop. An express train only stops at certain stops. Being in an express subway stop means you can take the express train and bypass all the local stops.
In the context of apartment buildings, the express stop is the lowest floor in the building, usually the second floor. They always get off the elevator first. Conversely, the penthouse resident always gets off the elevator last, after residents from all the lower floors have gotten off.
Weimin’s article, Best areas to invest in Manhattan.
Living below the roof
Since a penthouse is below the roof, there is no upstairs neighbor. However, the penthouse is exposed to leaks from the roof and sometimes, workers may need to go through the penthouse unit for work related to the roof.
The penthouse unit is furthest away from street level and hence most insulated from street level noises. But depending on how high the penthouse is, you may hear helicopter noises. Nothing is perfect.
Advice for the investor
For investors wanting to park money, my advice is to get a penthouse in a building where real New Yorkers live in. As opposed to a “ghost building” where the building goes dark at night because majority of the owners are investors and do not live there. Reason is that a New Yorker’s building will have better appreciation potential, since buyers will be both New Yorkers and global investors (who are in the know). Too often, we see global investors buy in buildings that have mostly other global investors.
Weimin’s analysis, Best areas to invest in Manhattan
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property
4) Manage tenants
5) Market the property at the eventual sale
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