Buying New Condo in Manhattan, Tips for the Foreigner

Posted by Wei Min Tan on June 10, 2019

Buying new condos in Manhattan is a strategy that many of our foreign clients pursue.  The objectives are either for rental return or for use as vacation home.   By the time a foreign investor client reaches out to me, he would have researched extensively online and have a strong understanding of the Manhattan market.

 

In addition, the client would have read a lot of my articles on the subject of investing in Manhattan condos.  Still, there are many questions.  Understandably, buying a condo in a different country is a major undertaking.

 

Here are some tips for foreign investors:

 

 

Contact:  tan@castle-avenue.com

 

 

Photo below.  Buyer client bought this condo with a 500 square feet terrace when it was newly converted and resold 5 years later for significant profit.  

New Condo Info Overload For the Foreign Buyer

The main challenge I see foreign investors having is too much information.  New condos are all presented with beautiful photos and renderings.  Everything looks good.   Navigating all this information with only upsides presented is very dangerous.  Nobody is telling the foreign buyer about the downsides.

 

The brokers marketing the different new launch projects represent the sellers, hence they have the seller’s best interest in mind.  Buyer’s brokers do not market properties online.  Until a buyer retains a buyer’s broker, the buyer is alone without professional help on his side.

 

Read more:  A Buyer’s Broker for Manhattan Condominiums

Buying Freehold vs Leasehold

Clients from the United Kingdom, Singapore, Malaysia and Hong Kong are used to the concept of freehold vs leasehold.   This is one of the first questions asked – are properties freehold or leasehold?  In Manhattan, almost all properties are freehold.  The exception is Battery Park where the land is leased.  And a few buildings scattered here and there.  Apart from these rare instances, everything else is freehold.  This is good news to foreign clients from the leasehold vs freehold jurisdictions.

 

 

A high quality kitchen, including appliance type etc., is important when evaluating whether a new condo makes sense.  Pictured below is kitchen at a client’s investment condo at 959 First Avenue.  Reserved from developer, waited 2 years for completion, then rented out immediately to a highly qualified tenant.  

 

Rental Return

When buying a new condo in Manhattan, the rental return is not high, between 2 to 2.5 percent.  A rental return approaching 3 percent is considered very high for Manhattan.  This is normal for a top international city like Manhattan where prices are high.

 

Investors get into Manhattan for the appreciation.   Second tier and tertiary U.S. cities will have higher rental returns but the downside is lower appreciation.

 

Buying a new condo for rental return entails knowing what the market wants.  For example, what locations have strong one bedroom demand vs two bedroom demand.  What is the target rental clientele etc.  The rental potential needs to match the higher price of the new condo.

 

Read more:  Buying Manhattan property to rent out for diversification

Central Business District (CBD) and location drivers

Manhattan is the CBD of New York City.  Within Manhattan, identifying hot locations is very important.  The actual Wall Street is not where all the banks are anymore.  That was 100 years ago.  Now the banks have outgrown Wall Street.  For example, Goldman Sachs (green building in photo below) is now in Battery Park.  In other words, don’t buy something with a Wall Street address thinking that the property will be surrounded by investment bankers going to  work daily.

 

Photo below.  View of Goldman Sachs from client’s new condo.  Reserved at pre-construction stage, 2 years before completion.

 

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
4) Manage tenants
5) Market the property at the eventual sale

 

 

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Related Articles:

Manhattan freehold condo with attractive returns

Pros and cons of new condos in Manhattan

Best condos in Manhattan

Best areas to invest in Manhattan

 

About Wei Min

  • Focuses on investors of Manhattan condominiums, interviewed by CNBC, CNN, Wall Street Journal, New York Times
  • Ex-Citibanker, managed $500 million portfolio
  • MBA, University of Illinois at Urbana-Champaign
  • Manhattan resident since 1999. Currently lives in Tribeca with wife and 2 kids
  • 352 burpees in 23 minutes, student of muay thai kickboxing

Contact Wei Min

641 Lexington Avenue,
22nd floor,
New York, NY 10022





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About Wei Min


  • Focuses on investors of Manhattan condominiums, interviewed by CNBC, CNN, Wall Street Journal, New York Times
  • Ex-Citibanker, managed $500 million portfolio
  • MBA, University of Illinois at Urbana-Champaign
  • Manhattan resident since 1999. Currently lives in Tribeca with wife and 2 kids
  • 352 burpees in 23 minutes, student of muay thai kickboxing

Work With Wei Min

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