With a median rent exceeding $3,000 a month, New York City is one of the world’s most expensive real estate markets. Since 2020, the pandemic has slowed 10 years of unrestrained rent growth. At the same time, high unemployment has contributed to higher vacancy rates, as many New Yorkers have moved out of the city.
The current buyer’s market, which has fewer competitors and lower prices, makes New York City an attractive option for real estate investors. New York City comprises five boroughs, each coextensive with a New York State county. Here are a few buyer-friendly neighborhoods in New York’s boroughs ideal for real estate investment opportunities.
Upper East Side, Manhattan
The Upper East Side in Manhattan is one of the most expensive areas of New York City to purchase real estate. The tipping point, or the amount of time you would need to stay in a purchased apartment for it to make financial sense over a rental, is 30 years for the Upper East Side, compared to 5.6 years for other New York areas.
However, clever investors can find relative bargains. Currently experiencing a buyer’s market, the Upper East Side has a supply of homes that exceeds the demand for homes. Investors, therefore, have many properties to choose from and bargaining power in negotiations. According to Renthop.com, the Upper East Side has 2,780 listings for rent (as of January 2023), with a median price of all available listings of $3,700.
Inwood, Manhattan
Slightly more affordable than other Manhattan neighborhoods, Inwood has a tipping point of five years. Further, the area has not seen the same influx of luxury developments as other Manhattan neighborhoods, which makes prices still relatively affordable for investors. Situated at the tip of Manhattan, bordering New Jersey, Inwood is a low-rise area with a mix of five- to eight-story apartments and single-family brick homes.
Investors who buy properties to develop into high-density housing have the potential for significant returns. Even single-family homes make a reasonable investment—the median home price is more than $500,000 and median rents are just over $2,000 a month.
Inwood is home to Inwood Hill Park, which has a natural forest and walking trails. Combined with its easy commute to downtown, the area is particularly appealing to families and individuals looking for a close-knit community.
Bay Ridge, Brooklyn
One of New York’s most affordable boroughs, Brooklyn has a tipping point of just over four years, and the Bay Ridge area is historically even cheaper than Brooklyn averages. As of the third quarter of 2022, the median sale price was $532,000, compared to an $818,000 average across Brooklyn.
The area has a suburban, family-friendly feel, with plenty of retail and dining options that make it an attractive place to rent. With its healthy inventory of available homes, investors might add Bay Ridge to their list of potential New York City investment targets.
Bedford-Stuyvesant, Brooklyn
Bedford-Stuyvesant offers lower property tax rates than surrounding areas, as well as older housing stock that tends to be more affordable. Investors who want to update and renovate older housing will benefit from the increasing number of high-end cafes and retail stores moving into the area.
A home in Bedford-Stuyvesant has an average price tag of $1.4 million, while a comparable brownstone in Williamsburg might veer closer to $2.5 million. Many of the properties have already been subdivided, which means investors can purchase a single-family home and enjoy multi-family rental income. Over the past five years, home values appreciated by approximately 16 percent. Meanwhile, rent remains reasonably affordable, with single-bedroom apartments going for around $2,000 per month.
Long Island City, Queens
Long Island City has experienced significant growth in recent years, attracting residents to its parks, arts, and affordable real estate. While Long Island City is comparably priced to other neighborhoods in Queens, its appreciation and rapid growth make it a wise investment option, especially in certain areas.
For example, the east side of Long Island City has average home prices of less than $800 per square foot, offering outstanding potential for returns. As of March 2022, the median home sales price in Long Island City was $1.3 million, which is an 11.7 percent year-over-year increase. Niche.com gives the area a B on crime and safety, which is high compared to other New York City neighborhoods.
Kew Garden Hills, Queens
Housing in Queens offers a nice balance of affordability and livability. Residents appreciate green neighborhoods like Kew Garden Hills, which attracts nature lovers with its parks and numerous options for outdoor recreation.
Situated just south of the Forest Hills, Kew Garden Hills has many well-maintained single-family homes, plus medium-to-large complexes. Real estate investors might rent properties in different tourism seasons to maximize their return on investment. As of September 2021, the median asking price in Kew Garden Hills was $320,000 and the median rent price wa
Leave a Reply