More condo renters find neighbors in their landlords

A new kind of real estate investor has become increasingly common as the city emerges from the depths of the recession, according to the New York Times. Apartment owners are more frequently leveraging low mortgage rates and high rental demand into purchasing other units in their building as long-term investments. With bond yields low and the stock market still uncertain, these New Yorkers buy apartments in their building and manage them closely hoping to skim modest returns for years.

It’s a stark contrast from the boom-time investors who snapped up apartments anywhere they could find them in hopes of a quick-flip profit.

“These are people who are looking for investments they can understand and somewhat control,” said Halstead Property Development Marketing President Stephen Kliegerman. “The stock market has become something that’s not for the lay person anymore. But the one-off investor understands real estate and its income streams and sees it as an asset they can manage.”

Many of these new investors, first bought into a building at the height of the market, and moved in even as the recession hit and sales slowed. They nabbed additional apartments just as a rebound appeared to be taking hold. An advantage in these buildings that catch investors’ eyes are low initial tax rates and common charges, which help ensure the owners’ costs, combined with mortgage payments, remain below the rent they charge. [NYT]