One Chart Explains Why Billionaires Invest In New York Apartments
Posted by Wei Min Tan on November 14, 2017
Publication: Business Insider
Summary: Business Insider published Wei Min Tan’s chart that compares the performance of various asset classes such as blue chip stocks, tech stocks, U.K. stocks and gold to investing in Manhattan condominiums. The chart explains why billionaires invest in Manhattan real estate.
Wei Min’s contribution: In the period of analysis, the Dow increased by 8.4 percent, Nasdaq by 14.3 percent while gold was down 4.7 percent. Meanwhile, a Manhattan apartment was up 9.9 percent. Since most people buy property with a mortgage, when leveraged up, the return of a Manhattan condo becomes 19.8 percent. This exceeds the performance of the other asset classes analyzed. A key difference with property investment is that one can use leverage to magnify returns through buying with a mortgage.