Just because real estate in New York City is astronomically expensive these days, that doesn't mean the city's landlords are sitting pretty. For a landlord, turning a considerable profit on a rental can actually be quite hard (which, as with most great lessons, we learned from a game.) Some of the city's priciest neighborhoodsthe ones that seem like great places to invest in real estate with the intention of bringing in some cash floware actually some of the last places smart small-time investors should lay their money precisely because they're already so expensive. NeighborhoodX looked at rental return for $1 million investments in neighborhoods across the city, and the neighborhoods they discovered that returned the most in rent weighed against the purchase investment are some of the last most people would expect.
NeighborhoodX's analysis of where landlords received the most rent versus their investment in the property include a few parameters: they only looked at one- and two-bedroom co-ops rather than condos or new development. The analysis assumes the $1 million purchase is being made in cash (read: without a mortgage) and also doesn't include real estate taxes, co-op fees, and commissions, which skew figures. So, where in the city is the best place to invest $1 million in existing real estate with the intention of making money on rent? Check out the graph below, and don't forget to hold onto your jaw.
According to the analysis, Brownsville, Brooklyn is the New York City neighborhood that returns the highest gross rental income against a $1 million investment. In Brownsville, with a price per square foot of $201, and an average annual rent per square foot of $25, a landlord could generate $124,378 in gross rent for the year. That figure's helped along by the value of Brownsville property, where $1 million buys 4,975 square feet. Following Brownsville as the best neighborhoods for landlords is St. George, Ridgewood, and Morningside Heights. For an interactive version of the map, head on over to NeighborhoodX's website.
· Landlording! [Neighborhood X]
· Here Now, NYC's Best Neighborhoods For First-Time Buyers [Curbed]
· Which NYC Neighborhoods Can You Afford To Live InAlone? [Curbed]
· Cool Graph Things archives [Curbed]