Neighborhood Intel

Can't afford an entire house? Now you can invest in gentrifying neighborhoods like you would the stock market

By Virginia K. Smith  | July 2, 2014 - 12:59PM

While owning a home in New York increasingly looks like a pipe dream for all but the ultra-wealthy, that doesn't mean you can't make some money off of gentrification and skyrocketing housing prices.

At least, so goes the thinking behind CityShares, a new investment platform that founder Seth Weissman says "allows investors to participate in NYC real estate at a fraction of the cost of purchasing" a brownstone, according to a press release. Members can get in on the profits from multi-family properties in "appreciating New York City neighborhoods" for a minimum investment of $100,000. Not exactly cheap, but significantly less than the price of an apartment. 

The catch, as the Observer points out, is that you'd need to make more than $200,000 per year (or have $1 million stashed away) to participate, so the bar isn't necessarily that much lower than the one for buying a house to begin with. 

The program is launching in Bed-Stuy (with plans to expand into Harlem, Crown Heights, and Bushwick), with assurances that selected buildings will be ethically managed and hand-picked by the firm so you don't "end up a de facto slumlord," as the New York Observer puts it.

In the release, Weissman explains that at the outset, CityShares hopes to get returns of 12 percent or more, with 60 to 80 percent coming from rental income and the rest from the properties appreciating in value.

Provided home prices remain high (or get even higher), the plan makes a whole lot of sense. But looks like we may need to hold out for the option to invest in, say, an East New York studio, instead.

Buying a Brooklyn brownstone? New website unearths "secret" listings

9 things Manhattanites need to know before buying in brownstone Brooklyn (sponsored)

Flip or Flop update: Bed-Stuy brownstone in need of work sells for almost $1 million more than four months ago

10 things to consider before buying a brownstone

5 ways to live near Propsect Park--minus the Park Slope prices

I briefly stopped paying my student loans. Must I give up on buying a co-op and passing muster with its board?

Brick Underground articles occasionally include the expertise of, or information about, advertising partners when relevant to the story. We will never promote an advertiser's product without making the relationship clear to our readers.