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Why A New York Real Estate Investment is a Smart Move

The Big Apple Promises Big Returns on Rental Properties

New York City is the nation’s largest metro area with over 20 million people in the metropolitan statistical area (MSA). Millions of these residents are renters, due to the high price of purchasing real estate within the five boroughs. That provides rental portfolio owners countless opportunities for New York real estate investment.

But before you jump in and take out rental portfolio loans for New York City, you need to understand the particularities of property investment NYC style. The Big Apple may be the biggest rental market in the country, but is it one of the best rental markets in the US for you?

While New York City is one of the best cities to invest in rental properties, it is important to know these facts about the city:

Rentals are Scarce

Occupancy rates are sky high right now in New York City at 97.1%, according to Yardi. That’s an increase of 3.7 percentage points yearly, resulting in bidding wars when a rare rental property vacancy surfaces.

Two big reasons this is happening:

• People are returning to the city post-pandemic.
• Eviction moratoria are still in place, keeping landlords from evicting non-paying tenants.

The latter is a trend to watch in the coming months, but with occupancy rates so high (95% is considered a tight market), investors interested in buying rental property in NYC can be confident that the tenants will be there.

Rents are Sky High

The NYC rental market is also marked by increasing rent. The average rent is $3,496 per month, up 11.3% year over year, according to Yardi.  And with pandemic concessions expiring, rents in a tight market are poised to continue increasing.

Single-Family Rental Opportunities Lag Behind Multifamily

The first two points illustrate how much opportunity exists for the NYC rental market. The New York market comes in at 10% or last in terms of the percentage of renters who live in single-family houses.

While multifamily investments are more plentiful, there are pockets where finding a single-family rental is a fine investment. Rental yields in Ocean and Sussex Counties rank above the national average, while Kings County, Westchester, and the Bronx lag below the national average.

Investing in the New York City Rental Market

The price of purchasing rental property in NYC can leave margins tight, so real estate investors need to do their research before investing in any property. At the same time, investors need to move quickly, knowing that inventory is tight and New York real estate investment opportunities will be sold quickly.

Part of moving quickly is having a lender in New York who can finance rental property loans as well as fix and flip, multifamily, and new construction investments for real estate investors. As opposed to other hard money lenders in NY, Lima One Capital has the best suite of products for New York real estate investors, and we’re able to move quickly when you find the right opportunity. Contact us today to discuss your next deal, or if you have a deal in hand, you can speed up the process by applying now.