Buying a vacation or second home in Manhattan
Posted by Wei Min Tan on September 20, 2022
Buying a vacation or second home in Manhattan, New York has slightly different criteria compared to buying an investment property. In New York City lingo, such a holiday home is also called a pied-a-terre. Our clients with second homes here love Manhattan. They love the energy, restaurants, concerts and entertainment. Their primary home may be in an NYC suburb, across the country in the west coast, Europe, or even Asia. But they all have a special connection to Manhattan.
The key difference vs an investment property is that there is more personal preference that go into the selection of a pied-a-terre. For example, having a large terrace or being in a certain neighborhood. Whereas, buying an investment property is driven by the rental yield and market demand.
Read about Wei Min’s style in Best Manhattan property agents and Role of a buyer’s broker.
Personal preference
Personal preference is the key criteria when I help clients look for the right holiday home. For example, a client may want a 500+ sqft terrace or be close to Central Park where they can go walking in the morning and reminisce about when they used to work in Manhattan. They may want a condo close to a marina because they enjoy sailing. Or a client may want a condo in a certain building because now he can afford it.
View from a client’s holiday condo. This was a new development project. Booked at pre-construction stage and we waited for completion.
Location
Related to personal preference is location. While buying an investment property we always look at high demand locations so they are easy to rent out, buying a second home is driven by the client’s preference of location. For example, the client may like Flatiron or Gramercy because he used to work at Credit Suisse 10 years ago. He still loves the company that gave him the big break when it mattered. Or he and his wife met in Soho and they have always wanted a 3,000 sqft Soho cast iron loft with those enormously high ceilings and large windows. Most recently a client who grew up in the Upper West Side and now living abroad bought a condo in her old neighborhood.
Client’s three-bedroom condo in the Upper West Side.
Financials
Financially, having a second home is expensive. Relatively, it would be cheaper to stay at a five-star hotel each time you’re in Manhattan than to maintain a second home and the associated monthly carrying costs. But it’s not always about money and returns. Having your own place in a city you love without having to sleep in hotel sheets is a luxury. The emotional and personal value cannot be measured financially. A second home in Manhattan is one of the symbols of having achieved it and where one no longer needs a financial justification for everything.
But while there is no rental income, the larger driver of property value, the property’s appreciation potential, is still very much there with a Manhattan holiday home.
View of Central Park from a very high floor penthouse apartment. Buying a Manhattan penthouse has its pros and cons as well.
Should you get a second home in Manhattan?
If you can afford it, yes of course! Having a second home here and being able to come back to your own decor, furniture and bed is incomparable to having to stay at a hotel. The Manhattan second home will benefit from Manhattan’s steady appreciation. You just wouldn’t have rental income but then again, not everything is about maximizing returns.
Weimin’s article, New York property price trend
What We Do
We focus on global investors buying Manhattan condos for portfolio diversification and long term return-on-investment.
1) Identify the right buy based on objectives
2) Manage the buy process
3) Rent out the property or oversee the vacation home
4) Manage tenants if applicable
5) Market the property at the eventual sale
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