Real estate is an extremely competitive field. It takes courage to step up and become a real estate tycoon. But if this is your dream, New York is the perfect place to make that bold NYC real estate investment. An investor can benefit from appreciation, tax advantages, a high population, low vacancy, tourism, a solid job market, and more!
Read on for a list of the 8 best things about investing in NYC real estate.
Appreciation
This is one of the fantastic advantages of investing in commercial real estate, as well as any other form of real estate, in NYC.
NYC’s real estate market has a verified and dependable track record of long-term appreciation. The value of properties over the past 100 years has continued to rise. The prices of real estate properties have appreciated almost 1,000 times per decade!
Therefore, individuals who decide to invest in NYC real estate can be almost guaranteed to see significant returns over time.
Market Diversity
There are myriad real estate investment options to choose from in NYC, especially in the city. Some of the best ways to invest in real estate include purchasing an apartment, turnkey properties, or shares in a REIT (Real Estate Investment Trust).
Condos in boroughs such as Manhattan, Queens, Brooklyn, and Staten Island are considered a highly affordable option in real estate. Experts at Hudson Condos suggest getting in on this booming market.
However, investors can also choose from a variety of expensive real estate properties and multifamily properties in smaller suburban or rural communities in the Tri-State region, which comprises New York (NY), New Jersey (NJ), and Connecticut (CT). You’ll find there’s an enormous choice of price range depending on your budget.
Rental Income
Naturally, rental income is an investor’s primary concern. NYC provides an excellent market for investors who are searching for a stream of passive income that is steady and reliable.
In 2022, one-bedroom apartments and studios in NYC were rented for approximately $3,000 monthly. While two-bedroom apartments were at $3,800 per month. On average, rent in NYC now sits at $3,200 for an apartment. This increased a striking 6% compared to last year.
There are many reasons rent prices are so high in NYC, which we will discuss. But all of these reasons together have driven up rental prices tenfold in the past decades.
High Population and Low Vacancy
Population density is one of the key reasons rental prices have become so high in NYC.
There is an enormous number of people crammed into one space in NYC. At the end of 2022, there were more or less 19.68 million residents living and working in the state. This number has been increasing since then.
Meanwhile, the vacancy rate for rental properties lies at around 4.3%, which is lower than the national average of 5.8%.
Therefore, in NYC, one of the most populated cities in the US, people are willing to pay high prices to rent.
City Life
NYC was coined The City That Never Sleeps for a reason. There’s always some other exciting event or goings on no matter your preference.
Visitors and residents can indulge in experiencing museums, famous landmarks, major sports teams and events, and more.
All the while, residents on the outskirts of NYC commute to the city hub for work every day. Therefore, real estate investors can benefit considerably from purchasing property in the 5 boroughs and NYC’s suburbs.
Popular Tourist Destination
Tourism provides many benefits to residents and businesses in a particular area. Real estate investors are among these.
People from all over the world flock to NYC to experience everything the city has to offer. In 2019, there was an influx of 265.5 million visitors!
NYC is ranked very highly among cities across the globe in the characteristics of attracting capital, business, and tourists. This results in multitudinous short-term and long-term rental income opportunities for investors.
Diverse and Robust Economy
NYC is truly a global hub of business and commerce. The area is home to many major industries such as finance, healthcare, and technology.
There are also many retailing, banking, world trade, transportation, and tourism opportunities. So, the job market for renters is irrefutably stable.
This means a real estate investor’s potentially expensive investment in NYC is a valuable one. Although the median home value and rental rates may be high, the economy and job market are strong.
Tax Advantages
Tax is a topic that’s at the back of our minds rather consistently. Fortunately, the rental income tax rates from real estate in NYC are generally lower than those of other types of income.
Those who are considering investing in NY real estate can enjoy deductions in mortgage interest, property taxes, and depreciation.
There are a variety of exciting tax incentives and exemptions for real estate investors in NYC. For example, the state offers a tax abatement program that applies to new construction or renovation of residential buildings.
