Is Manhattan Real Estate a Good Investment?
If you are thinking about investing in Manhattan real estate, there are many different factors you will need to consider. What type of real estate to invest in? Who to invest with? And one of the biggest considerations is definitely the location. Here are some tips.
Where you decide to invest can make a huge difference in whether your investment is a success or an expensive lesson. Today we are talking about Manhattan and whether the Big Apple is a good location for investing in real estate.
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What does the Manhattan real estate market currently look like?
Manhattan is the most populated and most coveted borough of New York City. It is no secret that renting in Manhattan is expensive, especially when compared to other cities in the United States. We have all seen the movies and read about the tiny apartments renting for over $2,000 a month. Yes, remarkably there always seems to be high demand for them. People are obviously willing to pay an exorbitant amount for what is an extremely basic and small living space. But what is the current market like in Manhattan?
Castle Avenue states that the New York City property market has been experiencing a slowdown since mid-2017. Property values rose between 1999 and 2008, then went down until 2009 (due to the financial crisis). 2011 – 2017 saw property values rise again before falling. So, it is hard to say how long the current market drop will last, and what the next couple of years will bring. But one thing is for certain – it is a buyers’ market. Manhattan condo and apartment prices are at their lowest in years. The current average price per square foot is currently $1,898. It is impossible to know when the current market will go up, but if you have the opportunity to purchase, now is definitely the time to do so.
Is Manhattan a good location to Invest?
Whether Manhattan or other parts of New York City is a good location to invest is somewhat speculative and depends on a number of factors. According to Castle Avenue, Manhattan is considered one of the top two cities for asset diversification and price stability (the second location is London). It is not uncommon for investors around the globe to keep an eye on the Manhattan property prices. This is because while prices are higher than in other cities, growth is steady and rental prices are high.
While it is true that any quality property in Manhattan is usually going to be a good investment, you need to keep in mind the high price of even a small apartment. According to the NY Times the median price for a one-bedroom apartment in Manhattan is $710,000. So, while rental potential will be high, mortgage repayment prices will also be high. Unless you already have a fair bit of startup capital for a decent deposit, then you will struggle to get a loan. Or one that will bring in a profit and make it worthwhile. Do not expect to find a three-bedroom apartment for under $300,000 like you would in some cities.
Why do investors like to choose Manhattan?
Manhattan is among the top cities on the radar for global investors. There are a number of reasons for this as highlighted by Millionacres:
- Asset diversification. There are many different types of assets and investment options within a small area in Manhattan. No matter what area of real estate investing you want, there will be something available that will bring promising returns.
- Steady price increases. Property prices increase consistently in Manhattan. So any property bought is likely to rise in value over a short period of time.
- High rental demand. No matter what is happening globally or in the economy, rentals are always going to be in demand in Manhattan. And if you own a property in a key area or have a feature that is in demand (such as a view of Central Park), then you will always be able to demand high rent.
Is now a good time to invest in Manhattan Real Estate?
If you are going to wait for the perfect time to invest anywhere, then you will never end up doing anything. There is never going to be a perfect time for any sort of real estate investment. Sometimes you need to just bite the bullet and just go ahead. As any investment expert will tell you, investment in Manhattan is rarely a bad idea. There will be unfavorable properties in Manhattan like everywhere. But as long as you choose wisely and stay in the high-value areas of the city, then in the long run you are likely to succeed.
Norada Real Estate mentions that due to the current economic climate, mortgage rates are extremely low in all places (not just Manhattan). So if you were thinking about taking the plunge and purchasing an investment property, then as long as you choose an area that shows potential for growth, then now is a good time. Rentals are always going to be a necessity, especially in a city as large and diverse as Manhattan, so finding a tenant should not be a major concern.
Manhattan is considered one of the best cities in the world, and for more than just living. It is an investor’s dream because it is a bustling metropolis, and it is looking to continue to grow in popularity, especially as the global economic climate improves. Investing in real estate in a major city is always going to have its advantages, and you do not get much more major than Manhattan. If you were thinking about investing in real estate in Manhattan, and you have the means to do so, then you could be setting yourself up for a very beneficial, long-term investment. Like with any investment you need to make sure you do your research and purchase smartly.
Charles is the founder of infoSpike.com. He enjoys real estate investing, marketing, and personal finance. Read more about Charles here.