There is a prejudice that buying an investment property in Manhattan is reserved for real estate moguls. Well, think twice! NYC is definitely not for fainthearted people, even though investing in real estate here seems like a safe bet. According to quarterly reports, NYC real estate prices are usually on the rise, some stagnate but not for long and one thing is certain, they are not going down any time soon.
Even though NYC sounds scary in probably every category of life, buying an investment property is something that can be done for a reasonable amount of money. Some of the best Manhattan rental brokers will tell you that it is realistic to become a landlord in Manhattan for under $500,000. Let us try to give you a crash course on an investment property in Manhattan. Find out why more and more people are choosing to invest their money in this way.
Essentials guide to buying an investment property in Manhattan
It is common sense to assume that owning a real estate property in NYC is a good investment and you wouldn’t be wrong. This also explains why so many foreign investors are buying in. Finding reputable Manhattan movers will be the least of your problems when you start navigating NYC’s real estate market. If you are interested in buying an investment property in Manhattan there is plenty of opportunities for you to snag an apartment and rent it out for profit. But, before you decide to take the plunge, here are some basic steps you should know about.
Location is everything
If you nail this aspect of your investment property you are winning in the long run. New Yorkers are very neighborhood-centric people and they don’t like to stray far from their homes to get what they need. One of the probable reasons is the fact that owning a car here is almost “mission impossible”. While pros and cons to owning a car in NYC are pretty obvious, which neighborhood topic for your investment isn’t so much. If you are planning to rent your apartment, make sure it is in walking distance from subway or bus stop, and nearby good grocery stores, dry cleaners, banks, bodegas and nail salons. You should also consider areas with good public school districts.
What’s your time limit
Your time frame holds the same importance as a good location. This is also the first thing to ask any small-scale investor. It’s important to know whether your plan is to hold on to the property for more than a decade or you intend to flip it. For those interested in a quick flip, you might want to consider a fixer-upper that is valued below the market price. This option can generate a good profit. For those who intend to hold onto their property, consider buying in neighborhoods that are on the praise. The tricky bit is foreseeing the next big thing in real estate and investing accordingly. Once you find that gold mine come to us and get the best moving quotes NYC has to offer!
Condos vs. co-ops
This is the big question everyone is debating. Our opinion is that condos are the safest option. They might be more expensive but, there have fewer rules attached to them. Buying a co-op is a serious procedure and it takes a ton of paperwork and focus.
If you are not from New York it’s hard to even understand what a co-op is. We found a good definition on Quora: “Unlike a condo, co–ops are owned by a corporation. This means, when you buy an apartment that is in a co–op building, you are not actually buying real property (like you would in a condo). You are in fact, buying shares of the corporation.”
Co-ops make the majority of the offer in NYC and they are cheaper than condos. The downside of it is the slew of rules on everything you can think of. So when buying an investment property in Manhattan, save yourself a lot of time and look for condos.
Look for small bedrooms
This is another great piece of advice which is simple yet genius. When buying an investment property in Manhattan think about the square footage. No matter how big or small the bedrooms are, renters, pay a premium for the number of bedrooms. On the other hand, you are paying per square foot. Therefore opting for smaller bedrooms will save you some serious money. The ideal situation is to buy a small two-bedroom or three-bedroom or a one-bedroom in a doorman building, with the potential of turning into a two-bedroom.
Is $500 k enough to buy an investment property in NYC
The first question for potential buyers of an investment property is: How much of the purchase price are you willing to put down? If you’re looking at 20% down, look at it as more of a long-term investment as opposed to an instant income-generating property. Buying an investment property in Manhattan under $500,000 is very doable. Especially if you can afford to put down the whole amount in cash or a big chunk of it and finance the rest. Therefore this way you are more likely to get a positive cash flow. Again we prefer buying condos because co-ops, that allow unlimited subletting, are hard to find. Another downside to owning a co-op is that rules attached to it change frequently. Therefore you can find yourself owning an investment property that you can’t really rent out.
There are many more additional steps you can take to ensure a good property investment. Always look into properties with tax abatement and use the opportunity to save some cash. Always make sure to check the condition apartment is in. If you can’t do it yourself see if someone you trust can do it for you. Pictures are great and all but they can conceal real issues such as plumbing. One thing is for sure, buying an investment property in Manhattan will pay out, in the long run, no matter how bad the market is.