Residential real estate can be a profitable investment in New York City. The presence of numerous major companies in the city, combined with a large population of high-income professionals, helps ensure a stable real estate market. Foreign investors have also done a lot to keep values high. These factors have helped make New York one of the first real estate markets to recover from the Great Recession a few years ago.
According to one analysis, the compound annual growth rate of New York condos outperformed that of the S&P 500 between 2003 and 2013. Condos in Manhattan sold for an average price of over $2 million last year.
The downside of purchasing a New York condominium for investment purposes is its relative lack of liquidity. Unlike stocks, bonds and other traditional investments, a condo cannot be sold with a single phone call to a broker. Selling a condo can take months or years. Additionally, fees of brokers and real estate agents can be as high as six percent.
One way to increase the return on a New York condo is by renting it out. One-bedroom condos in Manhattan had an average rental rate of over $4,000 a month in 2015. Of course, renting out a condo means taking on the obligations and headaches of being a landlord.
Purchasing residential property in New York requires careful research, attention to detail, a thorough review of the contract terms and an understanding of the laws that apply to the transaction. An experienced New York real estate attorney can help the buyer avoid unforeseen pitfalls and conclude the deal successfully.
Source: Investopedia.com, "Manhattan Luxury Condos As Investments," Adam Hayes, accessed Feb. 22, 2016