Lizzy and Lissa break down the hidden costs – financial and otherwise – of luxury apartments. From granite countertops and rooftop pools to skyrocketing rent and hidden fees, they break down the true costs of high-end living. Is it an investment in your lifestyle or just a shiny trap for your budget?
Lizzy and Lissa break down the hidden costs – financial and otherwise – of luxury apartments. From granite countertops and rooftop pools to skyrocketing rent and hidden fees, they break down the true costs of high-end living. Is it an investment in your lifestyle or just a shiny trap for your budget?
Main Topics
00:00 Introduction to Luxury Apartments
01:05 Running The Numbers Segment
03:10 What Exactly Are Luxury Apartments?
04:21 The Amenities You Get
07:40 Corporate vs. Individual Ownership
15:32 Deal Breakers
24:36 Luxury Apartment Vibes
26:43 Social Dynamics in Luxury Living
38:05 Location and Convenience
40:30 Space and Storage Priorities
41:24 20 Cents Segment
References for Statistics
https://www.nmhc.org/research-insight/research-notes/2024/why-building-luxury-apartments-brings-down-rent-for-all/
https://www.globest.com/2024/04/15/luxury-multifamily-rent-growth-weakest-in-recent-memory/?slreturn=20241129160246
https://www.thepgrgroup.com/p/the-real-impact-of-luxury-apartment
Lizzy: Luxury apartments are high-end living spaces that tend to offer more amenities and quality compared to standard apartments. Of course, they typically come with a much higher price tag. So are luxury apartments worth it?
Lissa: Let's talk about it. Welcome to Net Net with Lizzy and Lissa, where we analyze hidden costs and empower you to make your own damn decisions in life. Each episode covers a different facet of life, and at the end of each episode, we each give our takes on whether or not we think something is net positive or net negative.
Lizzy: I'm Lizzy, a strategist and consultant with almost 20 years of experience in finance and investing.
Lissa: And I'm Lissa, a personal finance expert and a certified financial planner. We're best friends who talk about money-
Lizzy: And everything else.
Lissa: Are luxury apartments worth it?
Lizzy: First up, running the numbers on luxury apartments.
Lissa: Apartments classified as Class A tend to be both higher quality and more expensive than their Class B and Class C counterparts. All right, we follow the system, right?
Lizzy: Yep, yep, yep.
Lissa: A is good, C are not as good. Class A apartments recorded an effective asking rent of $2,213 per month in the first quarter of 2024 according to data from CoStar. Whereas Class B apartments rented for $1,671. Class C apartments were $1,347 on average.
Lizzy: Man. Okay, so Class A is five to $600 more than Class B and almost $1,000 more than Class C. All right, you're paying up.
Lissa: Big range, big range.
Lizzy: Big range. Okay, 41.3% of all apartments built in 2023 were classified as Class A.
Lissa: Wow. Almost half of apartments built.
Lizzy: Yeah.
Lissa: New apartments being built are Class A.
Lizzy: All on the rise.
Lissa: Well, while rents are higher in luxury apartments, they haven't grown over the past two years. According to CoStar, rent increases for upscale four and five star rated apartments plunged from 11.8% year over year to negative 0.3% in Q1, 2024.
Lizzy: It actually went down overall.
Lissa: Mm-hmm.
Lizzy: So that's interesting. With this economy not going up and this effect is not just for luxury units. In 21 U.S. Markets rents for Class C apartments, the older less glamorous units, are plummeting by at least 4% year over year. So rents are going down.
Lissa: Yeah. I mean, we'll talk about it. We could just be in a weird moment in time.
Lizzy: Could just be a weird point in the economy, yeah.
Lissa: Yeah. Well we know there's more to life than numbers and statistics, so let's talk about it. Are luxury apartments worth it?
Lizzy: All right.
Lissa: So let's define it a little further.
Lizzy: Yeah.
Lissa: So these luxury apartments ... Okay, is it a legal thing or can anyone call themselves a luxury apartment?
Lizzy: So, no, it's not a legal thing. The Class A, Class B, et cetera, those are fairly established criteria in real estate, not just for apartments, but for other types of real estate that are associated with price ranges and often development costs. When I'm thinking of a luxury apartment, there are so many of them around LA. So I think of there tend to be newer developments, they often have this kind of specific modern look and they offer a lot of amenities. That's kind of my association in my head. They're kind of merging with what you would get in a high-end hotel.
I actually read an article about that. Hospitality- ization of apartments. So trying to give you co-working spaces, gyms, resort style pools, pet amenities like a dog park or pet washing stations, covered parking or gated parking. Sometimes they have saunas, rooftops, pretty luxurious, elaborate amenities that interestingly may not be that much more expensive for them to offer, but increase the perceived value. And the funny thing is, I'm curious how much people actually use those amenities.
This kind of harks back to my experience with short-term rentals. So think Airbnbs, whereas an apartment would be considered a long-term rental. In short-term rentals, often the amenities that got the highest rate would be like a hot tub, for example, and that would usually give you a 25% higher rate per night and most of the time people wouldn't even use it. It's just something that they're looking for that's very attractive when they're booking, but they practically may not even spend very much time there. So, I wonder if that same effect happens with luxury apartments.
Lissa: Yeah, I don't know. Statistically, I will say from my own experience, when I was in my 20's, I lived in all types of apartments. But when I lived in what I would say more Class B, Class C apartments that didn't have those amenities, I would always dream about the day I could move into an apartment complex that had a pool and I could lay out and tan.
We live in Los Angeles so we get a lot of sun, but just to have it in my backyard where I could just go outside and have that versus drive to the beach. I know this sounds like [inaudible 00:06:13]. But you know what I mean? I always dreamt about that. And so I did end up a couple times in my adulthood renting from luxury apartment complexes.
Lizzy: And what was your experience?
Lissa: Varied. I have two that stand out. I have one that I used to live in, a luxury apartment, and you just know because when you look it up online or you see the brochure, these photos, they're these professional-looking photos. It's like the sky is so blue, the pool is so blue, the grass is so green-
Lizzy: Branding you all.
Lissa: It looks so beautiful. I would advise that you always look at it in person because you never know. It was a nice apartment complex. It did have a steeper price tag, I would say, than others in the area. I think some of the downsides for me was it was a huge complex, so there was a pool, but there was always tons of people in it. I never knew how clean it was because people were always using it. And also my biggest pet peeve about apartments, in general, but what I found big time in luxury apartments where I felt like there were thinner walls. I felt like you could hear every little step that someone took above you, underneath you or a shared wall.
Lizzy: Yeah, that's a common complaint. And so just to give a little more context, these are not hard and fast rules, but typically these newer developments are going to be ... They're a real estate development. So someone is putting up money hoping to get a return on that investment. So this is, pretty much all real estate is some kind of investment. These big developments, they're expensive, hundreds of millions, sometimes billions. They're very, very expensive. And so often it's like these big real estate funds that are doing this.
And so some of the reason they can do these higher-end things is it's economies of scale. You're pooling all of this stuff. So if you have a building with hundreds of units, you can make your money go further than if you have 10 units. And the relative cost of a pool is much, much higher. Often that comes with a corporate style of apartment management.
So Greystar is one of the really big ones. Avalon, we have a lot here in LA, where they're going to own or manage many, many, many buildings all around the country. And some people like that. Often that means there's a lot more technology, things are more automated. I have also often heard that it's kind of an inferior quality of in terms of the service. You get mixed results.
Lissa: Yeah, I would say mixed results. I remember living in smaller apartment complexes where there'd be four units or eight units. And if something was wrong, let's say a toilet was clogged or something, it could take a little longer to get someone's attention or you have one person to call and if they're not home then you have to wait. But they're on top of it because they have so few units they want to get it fixed.
And then on the flip side, when you have these huge apartment complexes, in my experience, they have a ticketing system where you can submit a ticket and they have a lot of people on call, on site, ready to help. But if 10 people's apartments have clogged toilets at the same time, you're still having to wait. So it is a give or take, give and take.
Lizzy: I've had both experiences. I've had in a small place, where it's a little more mom and pop and so it can be less efficient. I've also had in that situation where they probably don't have as much money to spend, so they're going to jerry-rig it, do a slightly half-assed job. I've had it in a luxury community where they have a full-time maintenance staff. It's not like they're just getting a handyman part-time, so sometimes they can be quicker or by the same logic they have scale. There's so many units, so sometimes it can be slow. So that's one of the trade-offs.
Lissa: Yeah. Okay, I have another experience, but I want to hear yours. Have you lived at what's considered to be a luxury apartment?
Lizzy: I have only one time. I've lived in all kinds of apartments. I would say actually more often with a individual owner. So maybe my last apartment was, this older couple owned it. And so by comparison I was saying you have a fund that's the investor. This might be just a normal person that's trying to grow their wealth, so they buy an apartment building. Lovely couple and very friendly, hands-on. And I've done that a few times.
And then when I was living in Orange County, which is south of LA, if you ever heard of Laguna Beach, that's where it is. I was living there and there is one company called the Irvine Company that has a monopoly on all of the apartments there. It is a love-hate thing. Some people hate it for those same reasons. It's more corporate. I lived in this luxury apartment community by the Spectrum Mall and I loved it.
Lissa: You had a nice spot.
Lizzy: I had a nice spot. It was beautiful. It was quiet. It was clean. It wasn't the craziest of amenities by some scale, but nice. A nice gym, nice yoga center, resort style pool. There was a cafe in the kind of quad area. I had an amazing experience living there. The only thing that I will say that was a negative is that the rent went up significantly every year.
Lissa: Oh yeah, I forgot about that.
Lizzy: Whereas when I was living in this other apartment that was just owned by a couple, I was there for five years and they never raised the rent.
Lissa: Not $1?
Lizzy: Not $1. Because for them, the stability of having a nice tenant they can trust. And my partner at the time had been there for 13 years. It's just not worth it to them. The consistency is what's worth it because they're doing this on the side. I think they were retired, but it's so much work to get a new tenant that they'd just rather not raise it. Whereas these other companies that have full management teams-
Lissa: And marketing teams-
Lizzy: Exactly.
Lissa: Okay. I forgot about that part of it. The raising of the rent. I think my favorite apartments that I've ever rented similarly were from an owner. So like a condo unit, and I rented from the owner. I don't know, something about those buildings felt like they were built with better materials, but also having the attention. An individual owner is not going to want something to go wrong with their place.
Lizzy: They're going to give a shit a little bit more.
Lissa: They're going to care.
Lizzy: The line to the owner is direct versus you're dealing with many layers of maintenance, management.
Lissa: Yeah. I lived in another luxury apartment in Playa Vista, which is a nice community in Los Angeles, very close to LAX Airport, and it's kind of like an enclosed community. It has an air of, I would say, of people feeling elite in there.
Lizzy: Yeah, it's like insular.
Lissa: Yeah. But I was part of that for a little bit, and that's because my job was there and I really wanted to live walkable to my job, which is very rare in Los Angeles to be able to just walk to work. Anyway, the price I paid for it was living at a luxury apartment right across the street that was very pricey compared to other rentals in Los Angeles at the time, and I'm sure now.
Lizzy: Still today, yeah.
Lissa: I remember I lived there for two years and they raised the rent, I'd say $200 after the first year. And then they were going to raise it again, but then I moved. But really $400 more per rent after two years, that's crazy. What if I wasn't getting paid more?
Lizzy: Yeah. I think that the law. There's a law in California specifically for units or buildings built after certain years. It varies. I want to say that it's like for the ones that are newer, they can raise up to 10% per year.
Lissa: That makes sense because it was like a $3,400 rent kind of place.
Lizzy: Exactly. But that's significant because that vastly outpaces inflation on the average and the income increases on average over a year. So it's significant. That's basically what I experienced as well. It was a couple hundred dollars every year. That does incentivize you to sign longer term leases, which they're also trying to get people to do. But it's definitely a trade-off, right? So I'm looking for an apartment now, just starting to dip my toe in it. And so I'm kind of starting to consider all these things. Going back into this process, I was thinking I wanted something really nice-
Lissa: Class A?
Lizzy: Yeah, Class A. Class A, y'all. All the amenities. And I think that's probably where I'm landing, but it's a trade-off. And so you mentioned some of the kind of costs of that, right? Obviously financially, apartments are expensive of all kinds right now, bruh. It is wild. But particularly these luxury apartments, although I think the Class A are not that different than these other older places right now. I think they're just all expensive.
Lissa: Oh, in cost?
Lizzy: In cost.
Lissa: In cost, but do you think you're getting more?
Lizzy: I think so.
Lissa: Amenity-wise? Okay.
Lizzy: So for example-
Lissa: I think space, you get less space.
Lizzy: It varies. So I've been looking, trying to find one bedrooms in various parts of the city. So, for example, in Pasadena, outside of California or outside of LA, for 2,500 to $3,000 expensive, bruh. There are almost zero for a one-bedroom that's 2,500. There are a lot in the 27, 28, if you're looking at luxury apartments. If you're looking at some of the older ones that don't have the amenities, often the inside of the apartment itself will be remodeled, but the outside will be ... It is built in the '70s or something.
Those are still in the 25, $2600 range. So only a couple hundred dollars more and you get newer ... You might get more open floor plan. So often in the unit itself, they'll have stainless steel appliances, they'll have marble or quartz countertops. So just more modern, a little more open, brighter, better light, and they won't have as closed off a kitchen in a separate room.
Lissa: Yeah, so it feels more open.
Lizzy: More open floor plan
Lissa: Mm-hmm.
Lizzy: Yeah. So not that big of a difference to where I'm like, I don't know that that's worthwhile. The things I will say that I'm learning and have been hearing and reading in reviews, like you said, thin walls, so lots of noise. Obviously you're sharing these amenities with lots of people. So you're dealing with, some people suck everywhere you go. So some people will say, trash in the hallways-
Lissa: Not cleaning up after their pets in the hallways.
Lizzy: Not cleaning up after their pets in the hallway. So hallways that smell like pee.
Lissa: Oh, I hate that.
Lizzy: People that just put stuff in the trash, like shoot near it and don't actually throw stuff away.
Lissa: Which doesn't make sense to me.
Lizzy: It's so stupid.
Lissa: Just put it down the trash chute.
Lizzy: People suck. Some that have a trash valet fee that is required, meaning they'll pick it up from your apartment, but you have to pay. And that just means the hallways are lined with trash and it's like a hundred bucks a month or something. And packages, so a lot of them will have a package room and sometimes that has those fancy lockers where you input a code. I had that when I was in Irvine.
Lissa: But enough for the quantity of packages room.
Lizzy: Well, I walked an apartment last week. What the person told me is that they have it all equipped to make it very safe and secure, but the FedEx people or the post office people will be lazy. So instead of putting them in the lockers, they just leave them and so people's packages get stolen.
Lissa: That's another thing.
Lizzy: So that's another big one. You definitely experienced that.
Lissa: Yeah, I had packages stolen for sure. And even in a luxury apartment that I lived at that had a package room, once those lockers are filled up, there's packages all over the place. And you want to trust that all your neighbors are cool, but even if a straight person just gets through the door, they can just grab whatever they want. I love stuff delivered to my doorstep in a ... I live in a unit I own right now, so there's a gate to get in and then packages delivered straight to my door. And I would prefer that over a big complex.
Lizzy: Which is hard because I think that's not specific to a big complex, is having package issues. A lot of small complexes aren't gated or the post office people, whatever, don't have access to come through the gate or won't come through. Living in a non-luxury apartment, we had our own fair share of issues like break-ins, definitely packages stolen, bikes stolen, cars broken into.
Someone lit a fire in our carport, homeless people sleeping in our carport all the time. There was no shortage. We didn't have a gate and then eventually they put up a gate but they couldn't lock it because the post office people wouldn't get in. So it just faked people out that it was locked. But there was a lot. And this is in a fairly safe area. It's just normal urban area.
Lissa: Got it.
Lizzy: So trade-offs.
Lissa: Yeah. All right. So you're looking for an apartment now and you are leaning towards a Class A type apartment. So nicer, higher end, more amenities. Everything's costing a lot. What are your deal breakers or what are your requirements when you look for a place?
Lizzy: My number one absolute deal breaker will not negotiate is in-unit laundry.
Lissa: Yeah.
Lizzy: My last building, older building, and this is common to not find this in older buildings. So the last apartment I lived in, we had a shared laundry room with one washer dryer.
Lissa: That you had to put quarters in or something?
Lizzy: For everyone, it was kind of dingy. Five years of that, I'm never doing that again. Mark my words. So number one is in-unit laundry. Overall vibe, if I'm going to pay for a luxury unit, I want a pool, I will definitely use it. The one thing I'm considering though is I have a puppy and there are some that have dog parks. I'm not really comfortable with a dog park, but just having some dog-friendly amenities would be nice.
My other alternative is do I get a small house with a yard and if I were to do that would probably be a way older place. That's just the way they tend to be, but it would have a yard for my pup. So that's a consideration. But number one is in-unit laundry, good amount of storage. I want it to be upgraded in modern interior, even if the building itself is old. Those are the main ones. There's a lot of nice-to-haves. I've definitely judged the gyms. So many of them have a gym that's all treadmills or ellipticals. To me, if they have a squat rack, they have a real gym. And some of them do, some of them don't. But I'm a go-to-the-gym person anyway, so.
Lissa: The one that I lived at in Playa Vista was nice. They had a nice gym, they had regular equipment, squat rack, all that, bench and machines, but they also had resistance training equipment.
Lizzy: Oh, that's cool.
Lissa: So next level, all the other.
Lizzy: I've seen some like that. That's really cool.
Lissa: So that was really cool.
Lizzy: In Irvine they had that yoga studio, which was nice. And then once a week they brought in a teacher to teach classes, so that was really cool.
Lissa: Yeah, yeah. Stuff like that is cool. Then you get to meet some neighbors too or build community out of it. Something that just came to my mind about that luxury apartment I mentioned that I lived at when I was way younger, like mid-20s. This could have just been an anomaly, but apparently I think right after I moved out that same year there was a shooting. Someone was murdered there.
Yeah, I don't want to say where it is. I don't want to make anyone feel unsafe where they live, but I don't want to make assumptions. A lot of the people that lived there, it was kind of like new money. It was younger people who ... We live in Los Angeles, this is where it was. And so I don't know people in the entertainment industry. I don't know, maybe some drug dealers, it looked like. It was just like ... It was a younger crowd who clearly had the money to pay for this luxury apartment.
So they actually did use the pool a lot because they were throwing parties. And so I think it's hard to know just based on the marketing, on a brochure, of whether or not a luxury apartment is going to be the vibe you want. So I'm glad you mentioned that because it could be rowdy, but it could also be peaceful. It just depends on the clientele.
Lizzy: Totally. And I've seen a mixed bag. So the one I was at was very family friendly and very quiet. But that's kind of Orange County, so that didn't surprise me. One I looked at recently, I was asking. And it felt very quiet, and from what I understand it's like a mixed bag.
And I have a friend who lives in kind of a renowned community in LA because they have a full basketball gym and that is a lot of families there, surprisingly. I had always associated it with young people. This is young or single people maybe or just a couple. So I've been kind of surprised how many families live in these apartments with kids and stuff.
Lissa: Yeah. All right. So luxury apartments, higher price tag, and the bigger ... I guess you said if it's investors and corporations running them, the higher likelihood of rents being raised or additional fees.
Lizzy: For sure, yeah. More corporate, which can be good and bad. I think a lot of the times I see it's a negative experience, but I've had a mixed bag. Definitely, one of the things about that is it's very by the book automated, so that can be nice. That also means if you're going to be late on rent, you might not have any leeway at all, right? It's just a less human experience. And some of these, for sure, have lower quality materials because they're probably trying to cut some costs where they can because this is an investment.
Lissa: Yeah. So are there other costs besides the financial?
Lizzy: I think there's social costs kind of each way because these tend to be bigger developments and that can be a good thing and a bad thing. You're more likely to see them I think in pretty dense urban areas. And I think the idea is to have that community vibe, so you're going to encounter a lot of other people.
You may not want that, right? Or you may specifically be looking to meet people, and that's a consideration for not doing something more isolated. I think that's part of it, dealing with those neighbors and encountering them. Someone just told me the other day in their parking garage, this woman was speeding and they're like, "Oh, I'm going to slash her tire."
Lissa: Why am I acting surprised?
Lizzy: Right, dealing with more neighbors can be challenging and you don't really have a choice. You're just all there. And again, those facilities are being used by more and more and more people.
Lissa: This is not based on any statistic, but a perception, on that note. I feel like the luxury apartment complexes that I've lived in tended to have more people who felt like elitist. And as such, I felt like there was more people with attitude in terms of, if one thing went wrong, if a package went missing, they'd be yelling, they'd be pissed even more. I can't really describe what that is, but I feel like maybe it has to do with you're paying so much to live in a nice place, so if something goes wrong, there's a higher cost of anger.
Lizzy: I noticed that in the reviews I was reading.
Lissa: Oh, yeah.
Lizzy: Some of them were very legit and some of them were like, they basically expected perfection.
Lissa: Like star service?
Lizzy: Yeah. Like there was a bug, and I'm like, "Sometimes there's going to be bugs, right?
Lissa: What's a bug? I pay so much for this luxury apartment. Why is there a bug?
Lizzy: Yeah. All right, you're not going to please everybody. But then the flip side is some of them are legit, and I'm like, "Yeah, I wouldn't want to be paying all that to have these crazy things." I also read that sometimes they'll start leasing out before the construction is done. They're still building a second building or something, so you have all the construction noise.
I think you tend to have more turnover. I feel like people stay longer in places that maybe the standards aren't as high in a certain way. So if you're going to live in a smaller building, maybe mom and pop kind of owner, you're going to stick around for a while. Maybe that's not rooted in anything, but that's my perception.
Lissa: Well, it's a perception I have as well. I think that makes sense because especially with, like you said earlier, if you are renting as more mom and pop, there is more room to negotiate, more leeway. And that's because the owner, if you move out and they can't fill the unit-
Lizzy: That's significant.
Lissa: ... that's significant relative to their revenue or whatever. Whereas a big complex, they could eat a little bit of those costs.
Lizzy: They're like, "Be gone, get out."
Lissa: Yeah, just be gone. We'll find the next person to replace you.
Lizzy: Similarly, I've heard that when you move out, the cost that they'll charge you. I did get charged. You know, you move in, you're supposed to take pictures.
Lissa: Like was it taken from your deposit?
Lizzy: No, they actually charged me above and beyond that for something stupid. There was one thing that was legit.
Lissa: Scratch on the wall?
Lizzy: Yeah. There was something where I think ... It had wood floors and they got scuffed in one spot that you couldn't get it out. I'm like, "All right, I did that. That's fair." But there was a couple other things and I was just like, "I don't want to deal with this. I'll just pay for it."
But I've heard that that can be really challenging or getting money back because it's more bureaucratic. You're just like lots of red tape. So if they overcharge you, there can be more like fees. So parking is a separate fee. Pets are a separate fee. They might have other ancillary costs or this was new to me. One of them, they have Internet for the whole building, and so you have to use their Internet.
Lissa: And without the choice to get your own faster Internet.
Lizzy: Without the choice to get your own, yeah.
Lissa: So, it's like some people like that.
Lizzy: It could be easier.
Lissa: It's built in, it's easier.
Lizzy: But what if it sucks?
Lissa: What if it sucks? What if it's down?
Lizzy: Yeah. That was a consideration for me. I'm like-
Lissa: People are using this bandwidth.
Lizzy: I don't know if I trust your Internet. I need this for my job.
Lissa: Yeah.
Lizzy: Yeah. So that's the trade-off. One of the things I think about is I work from home, so I like to have multiple environments I can work in. So the thought that there's a rooftop and then a community center and sometimes an actual co-working space. That's nice because I don't have to go far, but can go work for a couple hours here and there. At the same time, if they're not nice or maybe it's like you need to get out of the house more. You know, it's a trade-off.
Lissa: Yeah. Okay. Do you think most people use the amenities or not? Let's just say the pool. If there's a luxury apartment and there's a pool.
Lizzy: I think the pool gets used a lot. I've had mixed experiences where, like the friend I mentioned. His popping in the summer to the point where if I was a parent with kids, I'd probably be annoyed. But being a young person, it was fun. But yeah, lots of people, lots of groups, music, grills. And then where I've lived, it's pretty quiet and chill. Some places have multiple pools, so you get different environments. But I think that probably gets used the most. Though when they have game rooms or movie theaters, I don't know that those get used ever.
Lissa: I feel like they do.
Lizzy: Do they really?
Lissa: Because I definitely lived in one where they had something like that and I felt like there was always people in it or booking it. And I was like, "Okay, so what's the point if I can't-
Lizzy: Right. Well, that's true, too.
Lissa: For weekends when you want it, when your friends are free to come over, they're always ... Yeah.
Lizzy: Yeah, that's fair. One amenity that ... I've had a friend, they had a guest room, basically like a hotel suite. That if you had someone coming to stay, you could book it for that weekend.
Lissa: What?
Lizzy: I've had two people. One in DC and one in Portland. I've stayed in it a couple times when I went to visit, which was great.
Lissa: That's crazy.
Lizzy: It's really cool.
Lissa: Yeah, that's a good idea.
Lizzy: That was a great amenity. One of them I looked at had valet service for your car. Some in LA, in certain parts of LA, where there's a lot of studios, have a music studio in them or a recording studio. A couple in North Hollywood have that. Some of them are wild.
Lissa: I guess. Yeah, there's a complex or an amenities that suit so many different types of people.
Lizzy: Right. But I think that for some people it gets them on the hook.
Lissa: Yeah.
Lizzy: Yeah.
Lissa: But okay, now aside from amenities, do you think there is a social reason that people go for luxury apartments over not?
Lizzy: Oh, yes.
Lissa: Or do you think it's purely based on the apartment itself?
Lizzy: No. I think it's all wrapped up together. There is some element, for sure, of what is my space going to communicate about me. And if I have people over, I mean, I've thought about that. Like, okay, if I want to have people over in the summer, I want to have a pool. But I don't want to just have a regular pool. I want a nice pool with the cabana.
Lissa: But what if you do that once a year, is that even worth it to like-
Lizzy: Exactly, exactly. But I think it's a consideration, right? Or I was thinking about it ... I've thought about this recently. I'm like, "Man, everyone just goes to Lissa's. No one ever comes to my place."
Lissa: But I don't have a pool or anything. I just have space.
Lizzy: But that's the thing is, like the idea in your head of like, "Oh, when I have this, people are going to be here all the time." But are they really? Who's going to come over?
Lissa: Which is interesting because I currently live in a place right now, it's a townhouse unit. There's no yard. I have a rooftop that I don't use because there's a lot of spiders up there. I do have a grill, but I rarely use it anymore. So what I'm trying to get at is, where I currently live, I don't have these amenities. I don't have a pool. I don't have things like that, but I don't think twice about it. I think when you're searching for an apartment and you have this checklist of these things that you want, yes, you might use it if you have it. But if you didn't have it, are you going to notice it's not there?
Lizzy: That's a great point, yeah. That's a really great point. I think for me, I would like a pool. I know I would use it both in the summer, just like to hang out and to actually swim. I did use it when I had one, and there are definitely times in the summer I'm like, "I wish I had a pool."
Lissa: Yeah, right.
Lizzy: Or I'll make it a point to hang out with people who do have a pool. But that might be the only one and it's not a deal breaker. The rest I'm like, "It's a nice to have, for sure."
Lissa: But for you ... So this is for me. Whenever I rent a place, it's so important for me to have nicer, newer, cleaner bathrooms and kitchen because I cook so much and you use the bathroom every day.
Lizzy: I guess I would say that's a baseline for me because I want a renovated unit.
Lissa: Right. Which is why sometimes, I guess, most Class C type apartments that are older that don't have an upgraded bathroom or kitchen, you don't get that. I think you sometimes end up getting used to it. But for me, it's something I value so much.
Lizzy: I've definitely had that a few times where once I had this cute little house, one-bedroom house that was built in the '40s, so it was old school. It had a lot of character and I'm not anti-old homes, I actually really like old homes. But the bathroom, it was small and no storage. And the tile, it was that bright colored tile, where it was peeling. So I didn't love that. I'm trying to think of the circumstances. I don't think I'd ever do a Class C right now unless I had to. What would have to be the difference for me to do a Class B? It would either have to be way cheaper that it was a no-brainer.
Lissa: Or you went and you looked at it and you're like, "Oh, this is a good [inaudible 00:37:42].
Lizzy: Yeah, I don't know. I'm trying to think if it is even a function of cost at this point.
Lissa: Yeah.
Lizzy: I'm not sure. That's a good consideration.
Lissa: So you want the luxury look and feel.
Lizzy: Yeah. The other thing I will say, this isn't a hard and fast rule. I'm going to sneeze.
Lissa: Good. First sneeze of the podcast.
Lizzy: It's not going to come out.
Lissa: All right. I made her nervous.
Lizzy: Okay. I feel like the luxury units tend to be in more walkable areas or more walkable themselves because a lot of them have retail on the ground floor and older buildings not as much. That's not always the case, but that is something I definitely consider.
Lissa: You think that's unique to Los Angeles because I'm thinking about luxury apartments in smaller cities, suburbs?
Lizzy: In suburbs, maybe. Maybe not. But I do think in other smaller cities that tends to be the case, yeah.
Lissa: Still nearby, okay.
Lizzy: Especially cities that go more vertical, whereas LA is more spread out. They're often, it tends to be mixed use, so there's retail on the ground floor, which is just nice. I was looking at one that had an Amazon Fresh on the ground floor. I'm like, "That's convenient."
Lissa: For that one thing you're missing and need, you don't have to go far to go get it.
Lizzy: Yeah. Which is, I would say, in-unit laundry for the apartment itself, but location is the biggest factor for me.
Lissa: Yeah.
Lizzy: Where it is, what neighborhood, what part of the city, and then where relative to stuff that I go to all the time. Because convenience is very big for me right now.
Lissa: So I've lived in Los Angeles the last 20 years. I don't have a good gauge of what else is out there. Do you know if ... So the in-unit laundry thing is such is a deal breaker for me, too. I will not go back to a place that doesn't have a washer and dryer in-unit because I do so much laundry.
So typically I've found, in LA specific, it's way more expensive to get a place with an in-unit washer and dryer, if you're renting an apartment. And it tends to be a higher priced place, like a higher rent for a smaller square footage, but you get the washer dryer. Do you think that's the same across the nation?
Lizzy: I don't know. What I've been looking at lately. It's hard because the ones I have been looking at that have the in-unit are nicer apartments or newer apartments, but it hasn't necessarily been a size sacrifice.
Lissa: Oh, okay. Maybe it's just where I'm looking. I think it's probably different in LA, in Los Angeles and then the further out.
Lizzy: Yeah, I think it's probably more a function of the neighborhood in the area. So my last apartment was like 600 square feet for a one-bedroom, which is maybe average to small for a one-bedroom. And there's kind of two tiers, I would say, that I've been seeing. There's one-bedrooms around that and then there's spacious ones that are like seven to 800 and there's a couple hundred dollar difference, but a lot of buildings have both and so I'm looking for the bigger ones.
Lissa: Yeah.
Lizzy: I want all that space.
Lissa: You want space.
Lizzy: And all that storage.
Lissa: You have a puppy that's grown-
Lizzy: A growing boy, growing boy.
Lissa: Big dog needs space, needs space.
Lizzy: And storage. Storage is a big thing for me.
Lissa: Storage is big, too.
Lizzy: Closets. But even if it didn't have a great closet, if it has a lot of other, like a linen closet, a coat closet, built-in storage, what's the kitchen like? A lot of it's a vibe check. Vibe check, for sure. Yeah. All right, y'all.
Lissa: We ready? 20 cents. 20 cents is the segment of the show where both Lizzy and myself, Lissa, each get 60 seconds to give our 2 cents on today's topic, whether it is a net positive or a net negative to go for those luxury apartments. Where does 20 cents come from?
Lizzy: You get the opinion of two dimes, y'all.
Lissa: Two dimes. Liz, you are up first. 60 seconds on the clock, what do you think? Are luxury apartments worth it?
Lizzy: Well, if it's not clear already, I am going to find out if they're worth it. I think so, in my past experience, it was definitely worth it. It was a luxury, for sure, in that these were not essential things, but I could afford it and I did and I did enjoy it and it was a great experience.
So that's most likely where I will be ending up unless I find some really cool house with a backyard that just checks all the boxes. That's probably the only thing that would deter me. So I think it will be worth it going in with my eyes wide open about the downsides of it. We are going to have to find out.
Lissa: But today-
Lizzy: But today, net positive.
Lissa: Net positive. All right, luxury apartments.
Lizzy: Yeah. What about you, Liss?
Lissa: I don't know. All right. I'm going to preface this with saying, I've lived in my own condo town home for the last five going on six years. And the last time I rented an apartment and the last time, Alan, my fiance or husband, whatever he is, the last time he rented an apartment ... I believe both ... We liked luxury, we like those amenities. The nicer, newer look and feel. But I think we might end up in one. But I think today I'm net negative.
Lizzy: All right.
Lissa: I think I'm negative for the main reason being right now what I really want is space. I film YouTube videos at home. I need a home office, he needs a home office. And if we have space and we have in-unit laundry, then I don't think we have to go for those major apartment complexes that have pools and things like that. I don't need all that. That's not to say that where we end up might not be nice and luxury-
Lizzy: For sure.
Lissa: ... but I don't think that's my priority.
Lizzy: That makes sense. Yeah, absolutely makes sense.
Lissa: Yeah.
Lizzy: All right.
Lissa: Yeah, negative.
Lizzy: I'm not that surprised.
Lissa: Yeah, I wasn't sure what I was going to say.
Lizzy: Yeah, you've shifted over time.
Lissa: Yeah.
Lizzy: Things change over time.
Lissa: I'm still bougie, you guys, don't worry about it. I'm still the same.
Lizzy: It'll still be nice. Don't get me wrong. It's still going to be a nice place, yeah.
Lissa: It's still going to be nice. All right. Well remember, this is what we think. At this moment in time, liz is a net positive for luxury apartments and I'm a net negative, but no one can make that decision but you. So, what do you think? Are luxury apartments worth it?
Lizzy: Hit us up. Let us know what you think. DM us on Instagram at netnetpodcast or email us at hi and Netnetpodcast.com. And if you want to follow us individually, here's where you can find us.
Lissa: I'm at Wealth for Women of Color on YouTube, TikTok and Instagram.
Lizzy: Follow me on Instagram and TikTok at Liz ... At Liv underscore, well underscore Lizzy.
Lissa: It'll be in the mix. All references, statistics and resources mentioned can be found in our show notes. This podcast is for educational, informational, and entertainment purposes only, and should not be constituted as financial advice. Remember to always do your own research, consult a professional as needed, and feel empowered to make your own damn decisions.
Lizzy: Nice.