Buying a Multi Family Property in NYC Is a Poor Investment
Why Buying a Multi Family Home in NYC Is a Bad Investment: https://www.hauseit.com/buying-a-multi-family-home-nyc/
Calculate Your Buyer Closing Costs: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
Buying a multi family home in NYC is a bad investment because rental yields are low, opportunity costs are high, dealing with bad tenants is mind-numbing, evictions are impossible, local rent laws are stifling and labor and maintenance costs are exorbitant.
Rental Yields Are Low
Rental yields are often under 3% in terms of cap rate. This is the case not just in Manhattan, but also in outer boroughs such as Brooklyn where investment properties have been bid up excessively over the past decade.
Buying the S&P 500 Is Easier
Buying a S&P 500 ETF and holding it indefinitely as Warren Buffet suggests is not only so much easier, but so much cheaper.
Not only is the dividend yield on the S&P 500 comparable to that of your typical multi-family investment’s cap rate, many S&P 500 ETFs have essentially unlimited liquidity with extremely low transaction costs.
Furthermore, whereas there is heavy competition between ETF providers on expense ratios, there is literally zero competition on property taxes.
Dealing with Difficult Tenants
While there certainly are unscrupulous slumlords out there, the media often ignores stories of nightmare tenants who take advantage of small time property investors who often don’t know the city’s myriad of rental regulations as well as they do.
Do you really want to deal with this scenario for a less than 3% rental yield? Even if you’re able to get the rent tax free because of depreciation tax benefits, what’s the point?
It’s Extremely Hard to Evict Tenants
It’s extremely difficult to evict tenants in New York and evictions must done through the courts, which can literally take months or even years. An owner can face fines or even jail time if he or she attempts to evict a tenant, either directly or indirectly. This includes trying to evict someone by cutting off utilities or otherwise making the residence uninhabitable or uncomfortable. And don’t even think about trying to force your way in to physically evict a tenant, that’s a serious offence!
Tough New York Rent Regulations
New York has some of the toughest tenant protection laws in the country. To start with, roughly half of the city’s private rental market is protected by rent stabilization or rent control, which translates to a whole slew of regulations not only on rent increases, but even the ability for tenants to pass down these preferential leases to heirs.
Security Deposits Are Regulated
Save Money with a Hauseit Buyer Closing Credit: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
#hauseit #hauseitnyc
https://www.hauseit.com
Calculate Your Buyer Closing Costs: https://www.hauseit.com/closing-cost-calculator-for-buyer-nyc/
Buying a multi family home in NYC is a bad investment because rental yields are low, opportunity costs are high, dealing with bad tenants is mind-numbing, evictions are impossible, local rent laws are stifling and labor and maintenance costs are exorbitant.
Rental Yields Are Low
Rental yields are often under 3% in terms of cap rate. This is the case not just in Manhattan, but also in outer boroughs such as Brooklyn where investment properties have been bid up excessively over the past decade.
Buying the S&P 500 Is Easier
Buying a S&P 500 ETF and holding it indefinitely as Warren Buffet suggests is not only so much easier, but so much cheaper.
Not only is the dividend yield on the S&P 500 comparable to that of your typical multi-family investment’s cap rate, many S&P 500 ETFs have essentially unlimited liquidity with extremely low transaction costs.
Furthermore, whereas there is heavy competition between ETF providers on expense ratios, there is literally zero competition on property taxes.
Dealing with Difficult Tenants
While there certainly are unscrupulous slumlords out there, the media often ignores stories of nightmare tenants who take advantage of small time property investors who often don’t know the city’s myriad of rental regulations as well as they do.
Do you really want to deal with this scenario for a less than 3% rental yield? Even if you’re able to get the rent tax free because of depreciation tax benefits, what’s the point?
It’s Extremely Hard to Evict Tenants
It’s extremely difficult to evict tenants in New York and evictions must done through the courts, which can literally take months or even years. An owner can face fines or even jail time if he or she attempts to evict a tenant, either directly or indirectly. This includes trying to evict someone by cutting off utilities or otherwise making the residence uninhabitable or uncomfortable. And don’t even think about trying to force your way in to physically evict a tenant, that’s a serious offence!
Tough New York Rent Regulations
New York has some of the toughest tenant protection laws in the country. To start with, roughly half of the city’s private rental market is protected by rent stabilization or rent control, which translates to a whole slew of regulations not only on rent increases, but even the ability for tenants to pass down these preferential leases to heirs.
Security Deposits Are Regulated
Save Money with a Hauseit Buyer Closing Credit: https://www.hauseit.com/hauseit-buyer-closing-credit-nyc/
#hauseit #hauseitnyc
https://www.hauseit.com