During the last five years, many new condominium developments have been built. Because mortgage rates have decreased, the largest ever boom in real estate history on the island of Manhattan was created. Finally though, it appears that the market for condominiums has slowed down. Investors who own condominiums had planned to turn condominiums in order to gain a quick and sizable profit.
Now they are discovering that it's a buyers market and they stand little if any chance of making much profit, at least over the short term. Condominium owners are turning to another way to ensure a profit on their investment. They are recognizing the less the one percent vacancy rate in the area and choosing to rent out their units.
Under current market conditions, investors/owners should consider their property to be a long-term investment instead of a quick flip. As an investment, they need to defray costs of maintenance and repairs and even turn it into positive equity over time. By transforming the owned property into rental property many investors will be able to generate positive cash flow if they rent the property, especially if the owner has previously paid more than ten percent down upon purchase.
Manhattan has a high population density and a constantly increasing entrance of new residents and workers so scarcity of housing continues to be an issue. Real estate brokers are taking steps to contact condominium owners in an effort to convince them to transform their condos to rental units. The real estate brokers often serve as rental agents in this market.
Since many of the condos are of fairly recent construction, they tend to have amenities which are not to be found in older properties, making them particularly attractive to renters. For the renter and the broker, apartment searching is much more pleasant with a private owners rather than a real estate management company. Management companies are usually very rigid about credit scores and salary and will strive to rent for the highest rental fee, even if it means a higher vacancy rate.
When you're dealing directly with the owner or his agent, he is much more likely to be a bit flexible in order to make sure the unit gets rented. You may be able to include membership in a health club in the building at no extra charge, for example. Balancing the need to rent in order to maintain the property, is the shortage of units. Some potential renters are offering increased willingness to pay higher rates. Offers of more than twice the average rate may still not be enough to ensure that the potential tenant will be able to move into the space that they want.
So the interesting dynamics in Manhattan mean that more owners are turning to rental of their units since selling the condo is not possible at present. At the same time, since the tide of transfers has not yet turned, there are fewer units available than there are those who are demanding space fo life.
Gus Taperman holds a Bachelor's degree in Commerce and completed his master's in Business Administration . He is working as writer and financial consultant to find a Personal loans, Debt consolidation, home equity loans at cheap rates visit www.taperman.com