Home Buying in Harlem>Question Details

Augustina0, Home Buyer in Jersey City, NJ

Which is a better investment in Harlem, one bedroom or two bedroom condo? Which is better for renting out in the long-term to cover mortage cost?

Asked by Augustina0, Jersey City, NJ Mon Apr 9, 2012

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Thomas Ripellino’s answer
Hi Augustina,

Generally speaking the smaller the apartment the higher the return (percentage wise). The ratio of rental price to sales price tends to favor smaller apartments for investors. An 800 square foot one bedroom apartment will not rent for twice the price of a 400 square foot studio (all other things being equal). But it will probably sell for twice the price ($ per square foot being equal).

Monthly running costs tend to be linear, however. For example, maintenance charges for a 800 square foot apartment are usually twice that of a 400 square foot apartment, all things being equal (floor level, view, etc.).

Also, when you have a vacancy, it will be easier to rent a smaller apartment because there are more potential tenants for lesser priced apartments (smaller). Think of the rental market as a pyramid. The base of the pyramid consists of the lower priced units, the peak represents the most expensive (there's probably only a handful of people looking for that $50,000/month penthouse). The more potential renters for your apartment, the faster you could potentially fill the vacancy. Shorter vacancies, more rental revenue, higher ROI.
0 votes Thank Flag Link Tue Apr 10, 2012
Both are good investments. A 2 bedroom will cost more but will also bring a higher rent. It depends on your budget and how much you can put down. Both are good long-term investments.There is a market for both sized apartments but there is more demand for larger apartments.

Best,

Mitchell Hall, asoociate Broker
The Corcoran Group
917-312-0924
MHALL@corcoran.com
2 votes Thank Flag Link Mon Apr 9, 2012
Mitchell Hall, Real Estate Pro in New York, NY
MVP'08
Contact
Much will depend on your budget, therefore it may be in your best interest to consult with your tax professional, and or financial planner....
1 vote Thank Flag Link Tue Apr 10, 2012
It really dependes of your budget. Either one has their own price for rent. It is better to lease for one year so you can adjust the price to the market after one year lease.
Any further information, feel free to call me at 917-378-9673 Vera at Manhattan-Spaces
0 votes Thank Flag Link Tue Apr 10, 2012
I believe your best best if you can afford the purchase price, is a 2-bedroom.
0 votes Thank Flag Link Tue Apr 10, 2012
always a better investment for a two bedroom if you can afford it as far as renting to cover mortage costs it really is a tricky question it all depends on many things
0 votes Thank Flag Link Tue Apr 10, 2012
Professional investors have ways to analyze and answer questions like this, using data about the debt service and multiple other factors and then crunching the numbers.

Pros don't invest based primarily on casual observations, or decor, because if you buy and rent out real estate for a living, you can't just hope for the best or base your strategy on luck, and expect to make enough money to stay afloat. Hoping for good luck is gambling, not investing.

I analyze comparative investments for my buyer-clients and would be happy to help you, and to represent your interests as your agent. There's no charge for this service because the seller pays the brokerage commission on the sale, and agents in NYC readily share commissions. So feel free contact me, I can help you make an informed decision.

Karla Harby
Lic RE Salesperson
Rutenberg Realty
kharby@crrnyc.com
212-688-1000x146
0 votes Thank Flag Link Tue Apr 10, 2012
A well priced two bedroom in Harlem will rent more easily than a one bedroom, I believe.
You will probably tap into the college student population and most often they want a
roommate thus needing a two bedroom.
0 votes Thank Flag Link Mon Apr 9, 2012
Hi Augustina,

The old saying
0 votes Thank Flag Link Mon Apr 9, 2012
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