Condo buyers beware: Renting out swank units isn’t a major moneymaker

Yields on rented condos in Manhattan were only 2.5% in the 2nd quarter of 2017

New York /
Oct.October 02, 2017 03:45 PM

Buying a condominium as an investment in Manhattan is looking less appealing these days as rents fail to keep pace with soaring sales prices.

The median return on newly purchased condos listed for rent was 2.5 percent in the second quarter of 2017, according to a recent analysis by StreetEasy. That means condo owners who rent out their homes yield only slightly more than they would on government debt, Bloomberg reported. The median yield on 10-year Treasury notes was 2.25 percent in the second quarter.

“This is the lowest point we’ve seen in history,” Grant Long, an economist at StreetEasy, told Bloomberg. “It’s a steady downward trend.”

A high supply of condos-turned rentals and climbing sales prices have made condos a less attractive investment. According to StreetEasy, more than 8,000 condo units were sold then listed for rent within 180 days of closing from January 2010 to June 2017. The median price of condos purchased to lease hit $1.7 million in the second quarter. In 2011, the median price was $899,000. [Bloomberg] — Kathryn Brenzel 


Related Articles

arrow_forward_ios
56 Leonard, PH 58 (Getty, Sotheby's)
$30M unit latest in string of deals at ‘Jenga Tower’ as record sale looms
$30M unit latest in string of deals at ‘Jenga Tower’ as record sale looms
Fidi condo tower risks foreclosure as Trinity Place Holdings races to refinance
Fidi condo tower risks foreclosure as Trinity Place Holdings races to refinance
Fidi condo tower risks foreclosure as Trinity Place Holdings races to refinance
Omni’s Garden Spires residents allege leaks, mice infestations
Omni’s Garden Spires residents allege leaks, mice infestations
Omni’s Garden Spires residents allege leaks, mice infestations
Zillow will resume iBuying, but pause raises questions over model: analysts
Zillow will resume iBuying, but pause raises questions over model
Zillow will resume iBuying, but pause raises questions over model
(iStock)
LI rental review board setting standard for local rental permits
LI rental review board setting standard for local rental permits
Two penthouse apartments were sold at 150 East 78th Street with the intent of combining them (Compass)
Double penthouse asking $33M is priciest listing snapped up
Double penthouse asking $33M is priciest listing snapped up
Ford estate fetches $105M, a Hamptons “record” but far below ask
Ford estate fetches $105M, a Hamptons “record” but far below ask
Ford estate fetches $105M, a Hamptons “record” but far below ask
HRI founder Aaron Carr and Virginia Attorney General Mark Herring (Facebook, Getty)
Housing Rights probe pins voucher discrimination on VA landlords, brokers
Housing Rights probe pins voucher discrimination on VA landlords, brokers
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...