New York apartment investment performance and returns
Posted by Wei Min Tan on September 12, 2017
The chart below compares the 2014 investment performance of Manhattan, New York condominium apartments with performance of the Dow Jones, Nasdaq, Gold and FTSE 100 indices.
The average price per square foot for a Manhattan, New York condominium appreciated by 9.9 percent to $1,552 per square foot at the end of 2014 when compared to a year ago.
If purchased with 50 percent loan, the return on the investor’s equity would increase to 19.8 percent. The assumption here is that rental income covers the expenses of mortgage, common charges and property taxes. This break-even is commonly achieved with a 50 percent equity, 50 percent loan purchase.
The performance of the Dow, Nasdaq, Gold and FTSE were based on comparing the index values (price for the case of Gold) at the end of 2014 vs beginning of 2014.
The key takeaway here is that a condominium in Manhattan, New York provides a stable return. With the use of a mortgage, the return is magnified. Leverage is common for property purchases but not as common for stock purchases.