Wouldn't it be great if you could wake up in the morning and walk to shops, restaurants and outdoor events? If you regularly travel to a major city like New York or San Francisco, it may make sense to get a pied-à-terre, a small apartment that you can use on weekends or for short jaunts to the city.
It's an apartment or condominium used as a second home or a "non-primary home." The term is French for "foot on the ground," as they were originally ground level apartments for busy executives who used them for part of the work week.
Today, they're a growing part of the real estate market and people buy or rent them for all sorts of purposes. A pied-à-terre is an urban living space ranging from a tiny studio apartment to a luxury condominium.
Most pieds-à-terre are located in large cities. According to a 2014 study from New World Wealth, London has the most at approximately 22,300. New York comes in second with 17,4000. Hong Kong came in third, and Singapore was fourth.
Typically owned by the wealthy, a pied-à-terre can make financial sense for all types of people, from business travelers to retirees. So, why should you consider getting a pied-à-terre?
Many people get a pied-à-terre because they frequently travel to a particular city for work. Staying many nights in a hotel can be a drag — and get expensive. According to a report by Travel Leaders Corporate, the average nightly hotel rate for a domestic trip was above $165 at the end of 2018. That doesn't even include money spent on meals.
When you consider that 7 percent of business travelers spend at least 30 days of the year in a hotel, it might make sense for companies to invest in pieds-à-terre rather than paying for hotel rooms.
For these professionals who spend a lot of time on the road, getting their own places may be the perfect solution to become more relaxed and enjoy the comforts of home during non-working hours.
Commuting long distances to and from work can be stressful. If you work long hours and then have to drive home, you may feel like you have no time to unwind and enjoy your evenings.
To weigh the costs and benefits of buying or renting a pied-à-terre, analyze your transportation costs and the toll that commuting is taking on you and your family. Having a place in the city could save you time and improve your physical and mental health.
If you have family in a city that you regularly visit, it may make sense to get a pied-à-terre nearby. For example, if your child lives in a studio or one-bedroom apartment in the city, you may be spending a lot of money to stay in a hotel because they have no room to accommodate you.
If you buy or rent your own apartment, you may save money and be able to visit more often. By setting up your own personal space, you'll also have the opportunity to be more independent and enjoy your own home away from home.
Many people live in the suburbs and dream about city life, living just steps away from shopping, dining, nightlife, museums, art galleries and live entertainment venues. But their home, job or family may keep them from spending time in the city.
Wealthy people (often empty-nesters or retirees) get a pied-à-terre so they can live in the city part-time and keep their spacious home in the suburbs. Rather than buying or renting a typical vacation home at the beach or mountains, they get a place in the city where they can enjoy cultural attractions and a faster-paced lifestyle.
A pied-à-terre is often purchased as an investment property. Foreign investors are buying up properties in major cities across the world to rent them out or occasionally travel to them to be close to good restaurants, theaters and galleries.
According to One Block Over, real estate brokers say that high-end buyers buy properties with concierge services, spas and fitness centers, resident lounges and rooftop bars with panoramic views.
Some higher-end condos don't allow short-term rentals, and some cities have cracked down on the use of Airbnb and other rental management services. If you're looking to buy a pied-à-terre, do your homework. Learn about the city's real estate market and local restrictions before investing in any property.
Renting before buying is always a good idea as it gives you the opportunity to get to know a place without making a long-term commitment. It's also cheaper in the short-term. Here are some things to consider when renting a second home:
Every city has its own restrictions on pieds-à-terre. They've drawn criticism for driving up housing prices and not contributing to the local tax base.
In New York City, it's best to buy a condominium as most buildings allow part-time residency. Co-op buildings have strict rules about pied-à-terre use. Many do not allow them. Others require approval on a case-by-case basis.
Property taxes on pieds-à-terre have been a source of controversy in NYC, especially as more foreign buyers have purchased luxury properties. A 2019 bill in the New York State Assembly proposed a tax on them but was blocked after intense pressure from real estate developers.
According to the New York Times, Paris, London and Sydney have all recently added or increased taxes on the purchase of secondary homes. In Hong Kong, non-permanent residents pay a 15 percent fee on the value of the home, and foreigners pay an additional 15 percent fee.
Singapore has a 15 percent tax and restrictions on the purchase of residential property by foreigners. In Denmark, foreigners must get permission from the government to buy a home.
Several French cities have a minimum year-long lease on apartments to prevent properties from being offered as short-term rentals. Amsterdam also has many restrictions on pieds-à-terre. You must register your property with the city, stay there yourself and can't rent it or use it as office space.
To make a decision, it may be helpful to first rent a furnished apartment for a month or two. You can see what it would be like to have a second home and take your time finding the right space to suit your needs.
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