New York, Manhattan to be precise, has become the main destination for global investors. They have always been buying Manhattan property. If you also want to be the one who will invest in property in Manhattan, you have to know the pros and cons of owning property in Manhattan. We can help you on this point.
Pros of owning property in Manhattan
-
The value of property in Manhattan is very stable
Property in Manhattan has stable appreciation. It ranges from 7 to 15 percent per year. Appreciation is driven by inflation and demand. Population growth and investors are the other two factors. College graduates and corporate professionals search for property in Manhattan every year. Even people who live in other parts of New York City want to move to Manhattan. This is a very popular island and living in Manhattan became a status symbol. So if you own property in Manhattan, the price of it can only go up. Never down.
-
You can make a lot of money from your Manhattan property
If you own property in Manhattan, the best thing to do with it is to make it your income property. This means that you can rent it out and it will pay off your loan for you. You won’t have to move a single finger. And as it is Manhattan property, the loan will be paid off very fast as rental prices in Manhattan are very high even for very small apartments. A lot of people have been looking for a moving team in East Village, Manhattan so this part of Manhattan is a perfect place for your investment.
-
Keeping an apartment in good condition is much easier than keeping a house in good condition
As there are mostly apartments in Manhattan, you will most likely be the owner of an apartment. That’s if you are not willing to spend around seven million dollars for a house in Manhattan or a mixed-use building. Owning an apartment is much easier as you don’t have to worry about the exterior, roof, boiler, and other things you would have to worry about if you owned a house. And maintaining an apartment is much cheaper too.
-
You will get a loan more easily
When you are an owner of Manhattan property, getting a loan is very easy. This is because you are able to pay them back as you have a property in Manhattan that is able to bring you money constantly. Even if you ask for a loan to buy another property, you will be able to get it very easily.
-
You won’t have to worry about your property being empty
Your property being empty won’t be a problem you might face. There will always be people interested in renting out and living in one of many Manhattans apartments. And if yours is on the listings, your phone will be blowing up with calls from people from all over the country and even world. Like we already mentioned, a lot of people want to live in Manhattan.
Cons of owning property in Manhattan
-
Buying property in Manhattan is very expensive
In order to buy a property in Manhattan in the first place, you will need a lot of money. A lot of your own money. The median home price in Manhattan is around $650,000 which is a lot of money. This means that you will have to take out a loan. And you need money so you can take out a loan to buy this property in Manhattan that you have been dreaming about. So if you are thinking about becoming a landlord of Manhattan property, prepare a lot of money. This loan won’t be just a small start-up loan, it will have to be very big.
-
You might not be able to find a property in Manhattan
Even though there are many investors, there aren’t many sellers. People who own property in Manhattan don’t want to sell it. For many obvious reasons. So if you are lucky, you will find something you might like. But don’t settle for less if that means owning property in Manhattan. Life coaches can go on and on why settling for less is bad.
-
Everything is more expensive
Labor cost is 4X to 5X the cost of material for renovation projects. This is because of much paperwork that has to be done before you start renovating. You need permits and insurance as well as many different approvals. The cost of the contractor’s parking is also very high. Limited use of the elevator means the renovation will last much longer than it should. This is exactly why you shouldn’t settle for less as you can’t rely on the renovation. For the amount of money, you will spend on renovation you can purchase an office space in Phuket, Thailand, for example.
-
It is a long process
The process of purchasing is very long. There will be a lot of paperwork to deal with. And even after you purchase the property, eviction is necessary. The system in Manhattan is more friendly to tenants than landlords. Eviction lasts between 6 months and 9 months. Then there must be proper screening for tenants too.
Conclusion
Is owning property in Manhattan a good idea? Overall yes. There are many pros to owning property in Manhattan as well as many cons. But the cons almost make it not worth the trouble. For $650,000, which is the median home price, you can buy several houses in North Carolina or Ohio and those will bring you the same amounts of money as one property in Manhattan. So before you go out and take out a loan to buy a single apartment in Manhattan, think about what else you can do with that big amount of money. It’s up to you to decide.
