April 18, 2018 | Buying
It doesn’t get any better than the penthouse. Expansive views, high ceilings, and the feeling of seclusion that you don’t often get in high rises are all great reasons to invest.
But it’s not all good news. Penthouses have their downsides too, especially when it comes to purchasing. Here we evaluate the pros and cons of penthouses so you can make sure you’re making the best choice for you.
So are Penthouses Good Investments?
If you’re investing in a penthouse to live in it, then there’s an undeniable status symbol with penthouses. If you’re investing to rent, then your buyer pool is looking for that status symbol. Offering a once-in-a-building suite makes your unit stand out to potential renters, giving you a competitive edge.
What most people are looking for in their penthouse is an unbeatable view. Preferably of the CN tower, which increases your suite’s value. In general, choosing a unit for its view isn’t always a bad choice, but you still have to look at the numbers.
While privacy isn’t guaranteed with penthouse units – shared terrace parties, anyone? – it’s still one of the best reasons to live in a secluded penthouse. You need to do your research to ensure you’re not overlooking or attached to a shared rooftop, or else you’re in for some late nights. Talking to your developer or a Realtor before you buy can help.
Penthouses usually have well-laid out, open concept, spacious floorplans, which is what buyers and renters are looking for. Living in a penthouse with a great floor plan is ideal for people interested in interior design and enjoying their space. A spacious, unique layout is definitely a pro of penthouses.
Floor premiums are charges developers add for every floor you go up – often, you’re looking at about $10,000+ a floor. When investing in a penthouse, you’re paying a premium price per square foot in comparison to units on the second or third floor. While, yes, there are a number of good reasons for this and a buyer will still pay you for that premium, it’s worth considering.
Elevators break down. Living on the 30th floor or higher when it happens means being late wherever you go – and hauling up thirty flights of stairs to get home. While taller buildings are usually good about fixing elevator issues quickly, it’s a massive consideration for those with mobility issues.
With higher properties comes higher winds. Considering Toronto’s weather, your outdoor space can feel more like a wind tunnel than a balmy oasis for ten months out of the year. Many penthouses can come with condo-sized terraces of five hundred square feet or more, and it’s not always useable space in the winter.
Smaller buyer pool
This is the crux of the issue when it comes to investing in penthouses. You’re looking at a smaller renter and buyer pool when monetizing your property. In Toronto’s post-Fair Housing Plan market, $500,000 condos and other affordable properties are selling like hotcakes, while luxury properties take some serious strategy and staging to sell.
Still not sure?
Every development is different. Not every development is worth investing in, while others offer fantastic opportunities.
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