Does a Penthouse Make a Good Buy-to-Let Investment?
One of the major foundations of any good Buy-to-Let investment is the quality of the product. If you have a good product, you’ll never struggle to attract tenants and building consistent returns won’t be an issue.
A quality development won’t struggle to find natural growth in the market either, which is a bonus if and when you decide to sell your asset. So what makes a good product for investors and more importantly, what does the modern tenant consider a good product?
BTL Investors Missing Out on Penthouses?
Crucially, it seems that as the market matures we’re leaning more to amenity-led developments. These projects will have exclusive facilities or amenities that help it stand-out from the crowd – vital in a competitive, renter’s market.
Desirable amenities seem to be those that streamline the day-to-day of residents such as a concierge service, proximity to work or nearby transport links. For example, Savills research shows between 15% and 20% of UK tenants prioritise a concierge-serviced accommodation or 24-hour security during their search.
Within the apartment itself, space is king. Whether it’s having plenty of room on the inside or a spacious outdoor area, the modern tenant wants value for their money. GoCompare research shows that nearly 49% of UK tenants prioritise the number of bedrooms above all else.
Outdoor spaces are also particularly appealing, especially in city-centres where quiet green areas are not always readily available – nearly 22% of UK tenants want a garden or roof-terrace, although this rises by an overwhelming amount for respondents aged between 18 and 24 – nearly 69% of whom prioritise an outdoor space.
Penthouses have all of the above in abundance, along with a natural reputation as a premium product. This makes them particularly effective as an investment asset. As you’d expect, a quality development is likely to have a higher initial cost but this shouldn’t stop investors from taking the opportunity. Premium tenants and thus, premium rental income, are attracted by quality developments.
Penthouses in Demand
Have you ever heard of the ‘Penthouse Premium’? According to Leonard Steinberg, the president of US real estate company Compass, penthouses stand out from the crowd and are ‘worth every penny’ because they can deliver a premium no other apartment can.
Penthouses in particular have a reputation as a luxury product that will always be in demand, especially if they’re located in the right place.
The rise of ‘Generation Rent’ has shown us that more and more people are looking for the flexibility that an apartment can provide over traditional home owning.
As the number of ‘transient tenants’ rises we’re seeing the potential returns for these developments skyrocketing. 50% of the British workforce would relocate in the UK for work, for example, while nearly 38% move for better employment opportunities.
This makes a premium product in a prime location much more effective, appealing to tenants that want better career opportunities or a city-centre lifestyle.
If the development is in an emerging location that’s making progress to building future growth, it will likely deliver consistent yields alongside natural growth. This is what gives projects such as The Grand Exchange in Bracknell so much potential.
Bracknell is a top location for high-level professionals, with over half (55%) of the working population in Managerial or Director roles, and is building a rapidly growing workforce meaning more demand for quality residential accommodation in the area.
The penthouses at The Grand Exchange are the pinnacle of a truly unique development, built to meet the needs of the modern tenant. With contemporary, clean interior design and exclusive resident facilities, it’s tailor-made for the professional tenant Bracknell is attracting. Discover how you can invest in a one-of-a-kind investment opportunity near London today: