Once you've locked down an apartment to actually live in, you may start thinking about buying one strictly as an investment. RealtyHop, a new sales-focused website from the folks behind rental search database RentHop, strives to help you judge a potential abode's investment value ... or just find a new home to call your own.
In addition to presenting typical listings details—things like square footage, building amenities, etc.—RealtyHop presents each property’s estimated investment potential in the form of a cap rate (a.k.a. annual operating profit -- which is the estimated rental income minus annual expenses and common charges, divided by the asking price).
While the cap rate analysis is most useful if you're hunting for condos, as many co-ops either don't allow or strictly limit sublets (making rental income a moot point), it's also an interesting way to look at an apartment's value.
In this week's roundup, you'll see a newly renovated Financial District two-bedroom condo, a sponsor unit co-op in Hudson Heights that doesn’t require board approval, and a brand-new condo in Williamsburg with in-unit laundry. All have estimated cap rates of between two and six percent, which RealtyHop says makes them reliable investments. (Note: Before you get serious, run the numbers yourself. RealtyHop's cap rates are based on the asking rents of comparable nearby properties, assume 100% occupancy, and don't factor in the cost of repairs, advertising, closing costs or sublet fees paid to the board.)
This newly renovated Financial District two-bedroom features a windowed kitchen with stainless steel appliances, stone countertops and all-new fixtures, as well as separate bedrooms and an entry foyer. The building has luxury amenities that include a doorman, a roof deck with barbecues, a screening room, a fitness center and a parking garage. Maintenance is $799 a month, taxes are $1,025 a month, and the estimated cap rate is 2.95%.
A keyed elevator opens directly into this BedStuy condo, which is outfitted with a stainless steel kitchen with a breakfast island, an exposed brick living room with a dining area, a large balcony, in-unit laundry, central air and a video intercom. Maintenance is $723 a month, property taxes are just $2 (!) a month, and the estimated cap rate is 2.94%.
This renovated sponsor unit in Hudson Heights has high ceilings, new appliances, an on-site laundry room, and most importantly—does not require board approval. There's also a relatively low maintenance of $830 and an estimated cap rate of 4.59%.
This 900-square-foot corner two-bedroom is located in Concord Village, a pet-friendly co-op community in Downtown Brooklyn. The building has a 24-hour doorman, a live-in super, bike storage, laundry in building and parking. Maintenance is $1,067 a month, while the estimated cap rate is 5.04%.
A living room large enough to accommodate a separate dining area plus a modern windowed kitchen and hardwood adds up to this bright Gramercy Park unit. The elevator building has a live-in super and a flexible sublet policy. The maintenance is $1,045, with a 4.58% estimated cap rate.
RealtyHop is a search engine for NYC apartment buyers looking for undervalued or great investment properties. RealtyHop listings include estimated investment potential in the form of a cap rate: a calculation derived from the annual operating profit divided by the purchase price.