10 Things, Besides Location, Luxury Real Estate Buyers Should Obsess Over
By Vanessa Grout
Last week on Forbes.com I offered you my list of frivolousthings that luxury real estate buyers waste too much money and attention on. Zen parks, electronics systems, outdoor showers—it’s not surprising that buyers shopping for high-end homes in big cities find these amenities tantalizing.
While sex sells, so does quality. And although a seductive marketing campaign can generate premiums unknown, there are certain attributes that a luxury property can’t be without. You already know the adage: location, location, location. But besides location, there are other things that high-end buyers would be wise to spend more energy, money and time on.
Consider, for example, the 10-foot beamed ceilings, classic millwork and practical layout at this New York City pre-war apartment, asking $4.2 million at 420 Riverside Drive. Or, if you prefer newer space, take the unassailable views and iconic architecture at this stunning apartment at 173 Perry Street in the West Village, listed at roughly the same price by my colleague, Leonard Steinberg.
While $4.2 million may seem like a high price,according to an analysis by Miller Samuel, in the land of luxury New York real estate this number falls well below the average sales price of $5.4 million. (The threshold for a property to be considered luxury is $2.95 million.) And both of these apartments are priced at a fraction of the $7,000 to $12,000-per-square foot rate that some buyers have been paying for luxury New York real estate.
Yet they have quite a few of the qualities I urge high-end property buyers to focus on. Here’s my list:
Unobstructed views and light. An apartment interior that is open to the outdoors and lets in lots of natural light improves your mood—and resale value. That openness is usually more important than outdoor space. Do you look at a park, a river, a bridge or a skyline? Are these views protected? Understanding the surrounding air rights and zoning allowances of neighboring buildings will give you a pretty good handle on your risks.
Ceiling height. The higher the better, up to about 14 feet (after that you’ll be getting diminishing marginal returns). Instead of looking at square footage, consider cubic footage. There’s almost no such thing as a luxury apartment with 8.5-foot ceilings. (An exception: An apartment with especially good unobstructed views and light that offsets the penalty from lower ceilings.)
Architectural uniqueness. I’m not entirely convinced diamonds are forever. But good architecture retains value. Do some research on the who’s who of architects and go for one with a good track record and beautiful, yet practical design. While it’s obvious how the building is perceived today, consider how it will be looked upon in a few decades. If you’re no visionary, at least look for “good bones”—a solid foundation, unusual details, high-grade materials and an artistic component.
Practical layout. Give yourself some room to live. If you own a luxurious apartment, you probably have a lot of friends. So maintaining clear separation between your social and private areas can be most rewarding. After all, you don’t want guests traipsing through your bedroom to use the bath. Eat-in kitchens are nice. Avoid apartments with long hallways, stairwells, awkward columns and other unfortunate space wasters.
Windows. They’re a primary source of heat and cooling loss. They should be double-paned and heavily insulated to protect against weather and noise. And unless your building is responsible for replacement, your condo or co-op board will probably not allow you to install your own.
Storage. Perhaps I’m biased on this one, being a woman. But seriously, how can we live without lots of closets and a copious additional storage room in the basement? Fortunately you are not limited by your potential home’s existing closet square footage. A custom closet company like California Closets can usually create whatever you desire in a storage space. But make sure your new home has some functional area available for that conversion.
The gym. A fitness area is one amenity that really does count, especially in winter cities. Yet proportionality is essential due to common area fees and tastefulness, so consider the size of the gym in relation to the size of the building. If you’re still not convinced you need this feature, just remember: It’s always bikini weather somewhere.
In-unit laundry. We couldn’t leave this one out. Yes, the laundry machine in the basement—and there must be one in the basement—works better and won’t take up your square footage. But in-unit laundry has become de rigueurfor any luxury apartment. Still consider the laundry a space waster? Convert yours to more closet space.
Consider it done and done. In my previous post, I advised against attributing too much value to custom kitchens, finishes, fixtures and other changeable characteristics. But let’s face it, high-end renovations done welltake time, and time equals effort and money. Some buyers really should avoid time-consuming, aggravating fixer-uppers. Moreover, developers nowadays hire big-name interior designers to fashion the apartments in their buildings—at a fraction of the per-unit cost you would pay for the same designer. In these circumstances, the premium paid for a move-in ready home is worthwhile.
Reputation. This may sound like something subjective and inconsequential. But in fact, when a building has a good rep, it tends to retain its value. Gathering the intel shouldn’t be too difficult. Opinions toward buildings are actively posted online, and most industry pros and established locals will have some sort of view. Learn about the range of values in the building and why some are high and others are low. Also, look closely at the resident composition. When a building is full of renters, transients or children whose parents purchased the units for them, there’s no respect for you and other owners. Plus the windows don’t get washed very often.
If you’re out shopping for a high-end apartment home in a big city, keep this list in mind. If you’re purchasing a property in the hopes that it will have lasting value, you shouldn’t compromise much on any of these 10 things. Focus on them first. The Zen parks and pet spas can come later—or not at all.
Back to Blog