It’s common wisdom that New York City real estate is a solid investment, which explains why so many foreign investors are buying in. But you don’t have to be a Russian oligarch to take a bite out of the Big Apple. There are plenty of opportunities for domestic buyers to snag an apartment and rent it out.
Before you do, here are a few basics to keep in mind, courtesy of Business Insider:
Condo vs. co-op: Co-ops may be a foreign concept to non-New Yorkers, but here they make up the bulk of apartments available. While they're often priced 30 to 40 percent cheaper than condos, they come with a slew of rules, including limits on whether and how long owners can rent them out. Not to mention, you'll face an approval process to buy one that will likely involve hefty financial disclosures, character references, an interview with the co-op board and more. On the other hand, condos are pricier but they come with fewer rules (they don’t require board approval and you can rent them out whenever you want).
Location, location, location: As you probably know, New Yorkers are very neighborhood-centric. We don’t like to stray far from our homes to get what we need. So if you plan on renting out an apartment, consider a location within walking distance of a desirable or trendy ’hood. And don’t forget to make sure there are necessary amenities—access to transportation, good grocery stores, dry cleaners, banks, bodegas and nail salons—nearby.
You get what you pay for: If you plan on renting out the apartment, know that a more expensive place will result in higher rent (while a cheaper one will bring in lower rent). A two- to three-bedroom apartment may be a smarter choice than a studio or one-bedroom since larger apartments tend to rent at a higher price per square foot.
Check it out in person: A picture may be worth a thousand words but it can also conceal a lot of ugliness: bad plumbing, broken appliances, cracks in the ceiling, etc. If possible, check out a potential investment apartment yourself. If you can’t, send someone you trust instead.
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