Investing in large 3 bedroom apartment to rent out in Manhattan New York

 

We guided our investor client in investing in a large 3 bedroom apartment in Manhattan, New York. This in anticipation of the rental market’s demand for larger apartments post Covid pandemic.

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New York residential property projects

We are seeing a wave of new residential property projects in Manhattan, New York with expected completion date between Spring 2015 and Spring 2016.

Buyers would typically put down 20 percent to book a unit and come up with the rest at time of closing.   If there is financing involved, the mortgage loan comes in at closing and the mortgage payments only start after closing date.

Residential property construction permits New York City

Number of new residential property construction permits in New York City is at close to the lowest level since the 1960s according to the Real Estate Board of New York (REBNY).  In the last decade 2000-2009, there were 231,228 residential housing permits issued.  The estimate for 2010-2019 is only 78,315 permits or slightly higher than the worst decade of the 1990s when about 70,000 permits were issued.

Manhattan New York 4Q 2011 Market Report

Manhattan New York 4Q 2011 Market Report from Miller Samuel Appraisers just released.  My analysis and summary :

From 1997 to 2011, price per square foot (Condos and Coops) increased from $328 to $1,117.   This equates to about 9.2% appreciation per year.  Since most people buy property with mortgage financing, if we assume a 50% financing level, the 9.2% provides a Return on Investment of about 20%.  Now, that's a very good, stable return.

Luxury residential property, flats in New York

Luxury residential property and flats in New York are in demand by global investors because of the stability of New York residential property and relative value globally.  While Manhattan is the most expensive market in the US, it's a lowly #10 globally in terms of price.

Foreign investors interested in luxury New York property/flats should consider the three points below:

1.  Select a good agent to filter the flats/property.  You can't rely on your own web search of properties from thousands of miles away.  In the US, agents have access to a database which means as long as they are part of the property trade association, they have access to all properties on the market.

2.  Learn about issues such as taxation.  This can be through the right lawyer and accountant that your broker could recommend.

Residential property, flat price trend New York

Residential property (flat) price trend above shows stability of flat price in New York even during the 2009 economic crisis.  During the 2009 downturn, the average property price in the US decreased by 35 percent.  However, the average flat/residential property in New York decreased by about 20 percent.  Manhattan New York has since rebounded from the low of 2009.

The average price of a residential flat in New York is $1095 per sq ft as of Q3 2010.

Visit us at Castle Avenue Partners - Manhattan investment property