Photo courtesy of Bloomberg Businessweek
With New York ranked as the world’s most coveted location for real estate investment, I have personally witnessed a seemingly historic influx of international buyers vying to get in on the city’s frenzy of real estate activity. Considering the complexities and local nuances associated with buying in Manhattan, overseas buyers are sometimes caught off guard by the process of buying in the city. After several years of working in this market, there are five primary areas of consideration foreign buyers should take into account when looking to purchase a home or investment property:
1. Price
First and foremost, buyers should be aware of the nature of Manhattan’s real estate market. With inventory recorded at historic lows, sellers are able to command higher asking prices, resulting in buyers being prepared to spend several hundred thousand dollars above the initial asking price. When purchasing in the city, considerations such as neighborhood, sales history, neighborhood growth and surrounding development each play a key role in a property’s bottom line.
2. Location
Being near iconic New York landmarks such as Central Park may be a crucial component when narrowing your search for a property. From established neighborhoods such as the Upper East Side to up-and-coming areas such as Williamsburg, buyers should be prepared to consider the overall vicinity that they would like to purchase in, paying special attention to the potential growth of that area from an investment perspective.
3. Type of ownership
Generally, foreign buyers prefer purchasing condominiums, due to its relatively easier ownership process. Conversely, for buyers looking to purchase a pied-a-terre, co-ops have become a popular option, due to the increase in inventory spread across a variety of locations, typically at a lower price-per-square-foot.
4. Space
Foreign buyers who are purchasing a residence appreciate light and space, as do all homeowners. For those looking for more expansive layouts, high-rise apartments with river and/or park views may be a great option.
5. Pre-existing vs. New Development Properties
Manhattan has experienced an exponential surge in new development construction, particularly those converted on former industrial sites. New development projects offer the luxury of purchasing as the first owner of a selected unit, boasting modern new interiors. In contrast, pre-existing homes typically offer original details throughout at a lower asking price, found in pre-war and post-war properties.