what are the risks of buying a penthouse apartment in new york city we'll
demystify this topic in the following video i'm Nick at hauseit visit
hauseit.com to save money when buying selling or renting real estate in new
york city long island the hudson valley or south florida so let's get started
so what are the risks of buying a penthouse apartment in new york city
well the first risk is that of possibly overpaying penthouse apartments
typically command a substantial premium for many reasons including the fact that
you have superior light views and exposure private outdoor space and and
so forth now that being said the premium
associated with these benefits sometimes can be inflated you might notice on
occasion that a penthouse apartment may not even have an accurate square footage
figure on the listing for obvious reasons because of the fact that the
true price per square foot would appear to be far out of line of course with
units in the building that comes as no surprise but possibly considerably more
money than other penthouse apartments in the area so please make sure that you
are actually getting a good deal having a good buyer's agent at your side can be
very helpful in this regard and of course here at hauseit we can help you
save money on your purchase while assisting you in the capacity of a
buyer's agent through our Hauseit Buyer Closing Credit service of course
depending on your budget the savings we offer can be substantial but on a
typical say five million dollar penthouse purchase here in new york city
our clients do receive a closing credit of in some cases up to a hundred
thousand dollars or in many cases more than a hundred thousand dollars on a
typical 5 million budget the closing gift will be even higher of course as
the budget goes further north so please do not hesitate to reach out if we can
be of assistance you can visit hausa.com to learn more
now what is the next risk associated with buying a penthouse well in our
opinion one of the most important things to keep in mind when buying a penthouse
is the risk of leaks certainly being on the top floor has its share of benefits
but of course that also means that you are the first point of entry and port of
call so to speak for water moisture and other sorts of hazards that come in from
the roof now of course in most cases a typical
penthouse won't have any egregious increase in the risk of course you'll
have to potentially be subjected to a roof repair from time to time people
walking on the roof doing mechanical repairs and so forth
trying to access the elevator room people repairing their hvac so that's
not necessarily a problem and you know the maintenance is usually
routine the problem is when there is a leak in the roof and it cannot actually
be detected in terms of where it's coming
from in these types of scenarios the roof
might have to be completely ripped down to the studs potentially redone
or they could put a layer on top of it and in some cases though unfortunately
even the roof itself is not the problem it could actually be the facade and what
they call the parapet which is basically that topmost layer of brick right where
it abuts the actual roof membrane and we've actually seen in cases like uh
like the one we're discussing where the actual leak is coming from the facade in
this case it actually required half of the top floor to literally be sliced off
the building and they had to actually rebuild half of the facade on the top
floor and obviously by extension rebuild the roof and
the membrane and so forth so you do have a remote risk of some catastrophic issue
occurring with the roof that literally requires you to have to move out of your
apartment and for half of your apartment to be sliced and for them to have to
redo it but it's a remote risk but more practically speaking what will happen
with regard to leaks is that you know from time to time water may enter the
source of the leak will be addressed it won't repeat itself but then you'll have
to you know have to make repairs within your unit of course like the the ceiling
the walls might have moisture damage you have to bring drywall people in and so
forth so it can just be annoying
as far as you know your quality of life is concerned another risk with buying a
penthouse apartment is the fact that you may be paying very high common charges
and property taxes in the case of a condo
now how much you actually pay depends on in the case of a condo the percentage of
common interest assigned to your apartment in the case of a co-op it
would depend on the number of shares assigned to your unit but in either case
the methodology for assigning this ownership interest to your particular
apartment is quite subjective and depending on the building you could have
a really egregiously high percentage of the building's common elements and that
will result in you having a very high share of the monthly operating expenses
assigned to the building and that manifests itself in having egregiously
high common charges so it's just something to keep in mind obviously if
you're buying a penthouse you have some degree of comfort in terms of fairly
high operating costs for your residents but nevertheless just be on the lookout
for egregious examples where you as an individual unit owner are paying a
disproportionately large share of the overall upkeep costs of the building by
extension another risk with buying a penthouse apartment is that you will
have huge assessments now this is related to the previous item we
discussed because the size of any assessment does depend on your
fractional percentage ownership in the building as a whole so depending on the
offering plan of your building and how that weighting was calculated originally
you can face a fairly large assessment or perhaps something more reasonable but
it all depends on the building and as a result doing buyer due diligence on the
size of your building's percentage common elements say in the case of a
condo is very important before you pull the trigger another risk of buying a
penthouse apartment is the fact that it might be hard to sell penthouse
apartments are expensive and by definition they have less liquidity
there's a much more laborious process associated with
selling them you just simply have to look at the average days on the market
in new york city usually is around 90 to 100-ish days for a typical apartment
typical apartment in new york city priced around a million dollars and as
that price point goes up certainly once you go by five million dollars the
average days on market blows out to something like six months or even longer
again it's not a huge concern if you're buying a penthouse because you do have
that degree of comfort in terms of allocating assets to this purchase
but just keep that in mind if at any point you need to sell and you want to
have that ease of liquidity in terms of selling it's going to be a little bit
slower of a process on average for a penthouse apartment now we'll leave you
with one more key risk of buying a penthouse in new york city and this is a
particularly important one to keep in mind it is the risk of your view your
light and your exposure being obstructed by future construction
now this risk is actually a risk for all apartments in the city regardless of
whether or not they're a penthouse but the reason why we emphasize it in this
particular video as it relates to penthouses is because of the fact that
you're usually paying a pretty considerable premium
to have the privilege of living in a penthouse you're at the top of the
building so they're really charging you for having the best views light and
exposure in the building as a result if something goes up across
the street or you know if your apartment has a lot
of lot line windows and there's neighboring construction the loss of
your view your light and your exposure could have
a disproportionate impact on the value of your investment
so it is just something to keep in mind now if you are at the point where you're
thinking of pulling the trigger there are ways to assess the risk there will
never be absolute certainty with respect to development in neighboring lots and
adjacent buildings and so forth but there is one way to get a pretty good
read on the situation and that's through ordering what's called a sightline
report many title companies do offer this service where they basically look
at neighboring lots around your apartment and they assess based on the
zoning and the existing construction what sort of unused development rights
may exist and how those may potentially impact your view
over time as as there is additional development so we hope you found this
video to be helpful please remember that we can help you save money here at house
it will learn how by visiting hauseit.com we'd love to also stay in
touch more generally we can help you sell and rent in addition to
buy in new york city long island hudson
valley as well as south florida so give us a call 888-494-8258
or send an email team@hauseit.com to get in touch you can also leave a comment
below this video and we look forward to connecting with you i'm Nick at Hauseit
and we'll see you on the next video