Best Size Investment Apartment for Rent in NYC

Posted by Wei Min Tan on July 26, 2022

Best Size Investment Apartment for Rent in NYC – The Size of condominium apartments for investment in manhattan ranging from studios to 4+ rooms. Global investors typically buy Manhattan apartments to rent out as a form of diversification. Our role as buyer’s broker is to advise clients on what is the right apartment, and we go through the process of identifying what is a good buy.

Best Size Investment Apartment for Rent in Manhattan New York

The median selling price for a studio and a one-bedroom apartment are $635,000 and $1.15 million, respectively. Meanwhile, a larger apartment, usually a two- or three-bedroom apartment, costs between $2.2 million and $3.9 million. Anything with 4 bedrooms or more is considered a mansion by Manhattan standards. People don’t usually buy an apartment with 4 or more bedrooms to rent out, but rather to live in or to use as a vacation home or foot-to-earth.

Weimin’s article: Buy a vacation or second home in Manhattan

The most important factors we look at when choosing the best apartment are location, building, and layout. We want to ensure that there will be a rental demand after the purchase and we can guarantee a good tenant for the investor client.

Transaction example: Guest water view apartment that overlooks New York Harbor.

Studios and 1 bedroom

Studios and 1 bedrooms are entry-level apartments. In terms of studios, there is not much choice as there are not many studios in luxury buildings which have good rental yields. We tend to recommend clients to invest in luxury buildings because luxury buildings command premium rents. For example, many studios in Downtown East Where Downtown West are in non-luxurious buildings and do not require high rents. These apartments also have a low rental yield.

Prices for 1 bedrooms range from $800,000 to $2 million. The sweet spot for 1 bedrooms is between $1.2 million and $1.8 million. This is where you get the most options in terms of highly desirable buildings and lines of apartments within buildings. There are certainly 1 bedrooms under a million, but these are usually in non-luxury buildings. The rent they will get will also be much lower.

Weimin’s article: Apartment prices in New York

2 and 3 bedrooms

Since Covid-19 pandemic, the demand for larger apartments, such as T2 and T3, has increased a lot. Indeed, people want more space, as many work from home part-time or full-time. There has been an increase in rental demand for 2 and 3 bedrooms.

Having a 3 bedroom investment condo is a valuable asset due to high demand and low inventory. Following a 40-year high inflation, rents have increased significantly. The average rental price for June 2022 increased by 29% compared to the previous year. For example, a 2 bedroom in a luxury building used to cost between $7,000 and $8,000, now it costs around $10,000 or $11,000. For the 3 bedrooms, rents are now $15,000 to $20,000.

Weimin’s article: Invest in a large 3 bedroom apartment for rent in Manhattan New York

Transaction example: Client’s 3 bedroom condo that was rented in 1 week.

Look at the location, the building, the layout

The first purchase driver we look at is location, whether the location has high demand for studios, 1-bedroom, 2-bedroom, or 3-bedroom. Second, we look at the building. The building must have high demand, and one way to easily see this is to look at the number of units for sale and for rent.

Finally, we look at the layout of the apartment, and it should be clean and practical. The layout also includes unit exposure. Since the buildings in Manhattan are all side by side, there is usually a preferred exposure, which means facing outward. For example, if facing out in a building means facing north, then the southern exposure would be facing in, meaning it faces the building behind.

Choosing the right apartment is both a science and an art. Science because it’s driven by numbers and art because it’s based on experience of what the market wants, which will rent quickly and at premium rents.

What we do

We focus on of global investors buy condos in Manhattan for portfolio diversification and long-term return on investment.
1) Identify the right purchase according to the objectives
2) Manage the buying process
3) Rent the property
4) Manage tenants
5) Market the property during the eventual sale

Wei Min’s media interviews by CNBC, CNN, New York Times about investing in Manhattan real estate

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