Successful entrepreneurs and professionals from around the world have been investing in Manhattan apartments for a long time.
We are very familiar with the reasons clients invest in Manhattan, New York because this segment is our focus. The basic drivers are as follows:
Capital Preservation
New York property is regarded as a safe investment against inflation, economic uncertainty, political instability and even theft in their home country. High net worth investors work very hard to accumulate wealth and they work hard at preserving it as well.
Clients investing in Manhattan property are not expecting high returns, which can be more easily attainable through businesses or property in emerging markets. Rather, they expect a stable rate of appreciation. At a minimum, they want their principal investment to maintain value.
Diversification
Clients understand the diversification concept beyond the business school split of 60 percent stocks, 40 percent bonds. Property in a prime city like Manhattan (or London) diversifies their asset portfolio.
Clients who are business owners do not have time to track and endure the daily fluctuations of the stock market. Manhattan property brings peace of mind and the semi annual or annual price updates they get is predictable.
Leaving For Children
Property investment in a top city is also a way to leave assets to children. Since price appreciation with property is driven by time, investors appreciate knowing property value would increase over time as their children get older.
The current down payment to purchase a property is small relative to what the property value would be 10 or 20 years from now. Appreciation in Manhattan is certain because this is a land-locked island with an ever growing population.
Wei Min Tan is a Manhattan, New York buyer's broker focusing on global investor clients. He has appeared on CNBC, CNN and The New York Times discussing Manhattan property as an investment. Wei Min can be reached at tan@castle-avenue.com
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