Best type of investment property in New York

By Wei Min Tan

Our clients, who are successful business owners or corporate executives from around the world, invest in Manhattan, New York property for diversification and long term stable asset growth. To this end, Manhattan, New York property, given its stable appreciation trend over time, meets the objective very well.

As we often explain to buyer clients, Manhattan property will not appreciate 50 percent a year like in certain emerging countries. This is because Manhattan, New York is not a speculative market. About 70 percent of buyers in Manhattan are locals, buying property to live in. This makes market prices stable. A market becomes volatile when majority of buyers are investors and even more volatile if these investors are from one or two countries.

International investors snapping up New York property

International property investors snapping up New York property - recent interview by The Cooperator.

Slicing the Apple

Foreign Buyers Fuel New York City

By Elisa Drake

3 Things To Know About The Manhattan Residential Market

1.  Average rent at $3,418 is a new record and has exceeded the pre-recession peak.
2.  Q1 2012 condo price per square foot was $1,317, up 8.3% compared to prior year.
3.  Spike in buyer demand in March and April, as if all buyers, local and foreign, have decided now is the time to get off the fence.  

Tribeca, chic property investment destination

Tribeca as a chic address in Manhattan in today's New York Times.  Picture of Bubby's above which has a Holstein cow outside the restaurant.  One of my favorite neighborhoods and where many clients have purchased investment property yielding great returns.

Chinese investors buying New York property

Chinese investors have been aggressively buying up Manhattan New York property in the past year.  I have been interviewed by CNN (Foreigners scoop up U.S. homes), New York Times (China's Wealthy Buying Condo Apartments) and Bloomberg on the topic and thought I'd do a summary of the trend in this blog post.


Overall, there is fear of a double dip in the US economy and the fear is reinforced by current news about the European debt crisis.  China's property market is beginning to slow and it seems there are few safe havens for investment.  Manhattan, New York property may be one of these few safe havens.  Chinese investors observed New York's price stability from the prior recession and view now as a time to enter the New York market while prices are recovering.

New York ranked #1 globally for property investment

New York beats London as #1 destination for property investment for the first time since 2007.

According to Cushman Wakefield, real estate investments in New York grew 166 percent to $29.7 billion in the last 12 months through August when compared to a year earlier.  London, at #2, saw investments increase 2.4 percent to $27.2 billion.

Interview with Kathy Braddock - our real estate niche

"How To Be Your Best" With Wei Min Tan from Jeffrey Markowitz on Vimeo.

Interview with Kathy Braddock on how I became a real estate agent and our niche of advising high net worth clients on Manhattan real estate.

New York Commercial Property Report

Manhattan tops in multi family transactions in 2010
According to Ariel Property Advisors, Manhattan was New York City's most active borough in multi family transactions in 2010.  Total transactions totaled $2.1 billion spread across 170 buildings with an average price of $440 per square foot.  Second was Brooklyn with 99 trades totaling $360 million.

Manhattan Real Estate: Direct Ownership vs. REIT?

Article as published in Thestreet.com Feb 22, 2010.  Manhattan Property: Direct Ownership vs REITs

Here are some pros and cons to weigh if you're thinking about direct property ownership in Manhattan, such as buying an investment condo or building vs. investing in a real estate investment trust such as Boston Properties(BXP Quote), SL Green Realty(SLG Quote) or Vornado Realty Trust(VNO Quote) that own commercial properties in the area.


No. 1, Liquidity: REIT wins. REITs are liquid and can be bought or sold with the click of a mouse. That's not the case with direct ownership in a condo or building because it takes at least three months to buy or sell.

No. 2, Entry level: REIT wins

Investing in New York Property - direct investment or REITs

Comparison of direct property investment (buying a condo or building) vs buying REITs (eg stocks of Boston Properties, SL Green, Vornado who own a lot of Manhattan commercial properties). 

America's Most Overvalued Cities - CNNMoney

America's most overvalued cities - CNNMoney


New York, NY (Manhattan) is shown as one of the most undervalued cities.  This is news.


Related links:
New York Investment Property
New York Property
New York Property FAQ
New York Property Price Appreciation History
New York Property articles and media
New York investment property search
Buying New York property

Manhattan housing inventory - Wall Street Journal report

Wall Street Journal - Change in housing inventory

It's great that they are finally breaking out Manhattan from "New York" because Manhattan has very different fundamentals from New York City in terms of foreclosures and impact of the 1st time homebuyer credit.  Note the 24% decline in housing inventory for Manhattan in the chart.

New York Property

Castle Avenue focuses on New York investment property.  Specifically, investment properties such as condos, townhouses and commercial buildings.  We will help our clients identify the right property to buy, arrange management and handle the eventual sale. 

Our recommendation for your New York property purchase will include appreciation and rental potential, neighborhood growth, yield relative to stocks and bonds and tax implications. The goal is to serve as an acquisition partner to local, overseas and international clients interested in purchasing New York property. 


Related Links
Castle Avenue - New York Investment Properties
New York Property FAQ
New York Investment Property Search
Buying New York Property
New York Property Price Appreciation History

New York Times real estate page
New York Office of real property services
New York City Online Property Register

Summary of CBS interview with Political Chick, Lisa Chase

Summary of my interview with CBS's Lisa Chase, The Political Chick, this past Monday.  Topic was state of the residential real estate market.

* In terms of US average, prices should decrease another 10%.  Reasons include:
- glut of foreclosures in the pipeline which will decrease average prices
- expiration of the 1st time homebuyer credit
- higher interest rates as the Fed ends it's mortgage bond buying program in March 2010

* However, real estate is LOCAL and hence one should look at price trends specific to one's local market.

* The Manhattan, New York condo residential market has bottomed in real time.  For example, new development condos traded at $800 per sq ft back in Oct/Nov and then increased slightly.  Real estate market reports will take until Q1 2010 to reflect this as these reports lag 3 months (time it takes to close on a property).  The 4Q 2009 report still shows average prices at $1000 per sq ft.  From this, it's obvious that the coming report will show price declines.

* Manhattan is much less affected by foreclosures and the 1st time homebuyer credit.  I do not feel the Manhattan market will double dip.  Rather, the bottom was here and over.  Transaction volume has been surging, a key signal that the market is finding its bottom. 

* The Obama Making Homes Affordable Program was bad economics.  Should never have started.  It's just delaying the foreclosure process as most intended recipients either have incomes that are too low or own properties that are already too far underwater.

* Over the past couple months, there has been a lot of foreign interest looking to capitalize on Manhattan's downturn. 

Best,
Wei Min
Castle Avenue Partners
New York Investment Properties

Interview podcast at chataboutit.com
New York property articles and media
Buying New York Property
New York Investment Property Search


Website:  http://www.castle-avenue.com/
Blog:  http://www.wealthre.blogspot.com/

Cold Weather Chills Housing Starts - WSJ

Link to article:  Cold Weather Chills Housing Starts


Wei min's comments:

Housing starts should tumble because we are in the midst of a foreclosure glut, real estate crisis and price declines of up to 40%. Just because housing starts were a certain number last year does not mean they should be at the "run rate" this year.

We would be in bad shape if housing starts increased.

$8 million in assets and can't get a mortgage - CNNMoney

Link to article:  $8 million in assets and can't get a mortgage


Weimin's comments on the article:
Banks are super strict with really large mortgages of high net worth individuals because they can't predict these loans since these are outliers in the credit models. No point taking the risk because these are not regular customers anyway.

Also, rich people w $8m net worth don't care about their credit score, do they? What would they need a stellar score for? They have the non-cookie-cutter ways of getting financing. They are sophisticated and would walk away when it no longer makes sense to make mthly payments. Unlike regular people who feel 'obligated.'. Hence banks are right to have stricter criteria.

FHA is a recipe for disaster. They require 3.5pct down for low credit people! Downpayment is the main determinant of loan quality/foreclosure. FHA is also technically insolvent. Should just be closed down.

China Property Bubble

Link to article:  China Property Bubble

As posted on Bloomberg.  In Shanghai, prices up 54% through Sept 2009.
In Beijing's Chaoyang district, housing prices at $300 per square foot, is 80X annual income !
People talk about real estate riches at the dinner table, no longer about their businesses or factories.

Housing Markets Most Likely To Have Hit Bottoom

Housing Markets Most Likely To Have Hit Bottom

New York, NY is one of the 14 listed, with 18% decline from peak.  These reports are 3 months lagging because it takes 3 months to close.  Those active in the real estate market have a much better gauge than reports.  But good to know.

New York Investment Property

New York investment property our investor clients buy are divided into condos (residential) and buildings (commercial or residential). 

Residential condos are popular especially amongst international / overseas buyers because of the simplicity of ownership.  Condo ownership requires minimal maintenance as the monthly common charges paid basically covers the required maintenance activities.  A tenant or renter who has issues while staying at a condo can easily call the building staff to fix the issue at hand, eg leaky toilet or ineffective heater.  Comparatively, if an investor owns a building, the investor needs to address issues like the roof, boiler, heater etc that may need repair.

Obviously there are advantages and disadvantages of owning a condo unit vs a building.  Here is a rough breakdown:

Condo:
Upside - ease of ownership, simple to understand
Downside - lower rate of return

Building:
Upside - higher rate of return
Downside - more management intensive, higher cost of entry

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View New York investment properties at Castle Avenue Partners.  We specialize in international and overseas clients interested in New York investment property.
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New York Commercial Property Yield

Commercial property yield in New York (Manhattan) is driven by price point.  The lower price point properties, less than $20 million, generally have an asking price at a 5 percent yield.   

The higher price point commercial properties, more than $30 million, would have a higher yield , perhaps 8 percent or more.  Reason is that at a higher price point, there are fewer players  which decreases demand.  Also, buyers at the higher price point are often institutions that put a lot more pressure on sellers from a pricing perspective.

The value of commercial property is driven by yield.  Similar to a stock's PE ratio.  The more the landlord can obtain in rent, the higher the value because a set multiple, in this case rental yield, would be applied.

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Visit our website http://www.castle-avenue.com/ to learn more about buying New York commercial or residential investment property. We focus on local, overseas and international investment property clients.

Wei Min Tan is a real estate broker and investor focused on investment property in Manhattan, New York. He can be reached at tan@castle-avenue.com