I’m probably like every other East Coaster who immediately associates the Bronx with the New York Yankees. You may beg to differ if you’re a soccer fan who doesn’t give a hoot about baseball and reside in Pendlebury, England, a few towns away from Manchester, the home of the highest-grossing sports franchise in the world. Nonetheless, I’ve lived on the right coast all my life and have tolerated Yankee fans for as long as I can remember. I can’t blame them. They’ve won 27 World Series titles and boast former players such as Babe Ruth, Mickey Mantle, and Derek Jeter. For that reason, the Bronx Bombers have a lot of bandwagon fans—folks who pick a team based solely on its success.
Sports purists don’t care too much for Johnny-come-lately rooters. I count myself among the sticklers but when I started to think about the Bronx and my real estate portfolio, riding the tide of success never seemed like such a bad idea. As rental and median home prices continue to soar in Manhattan, I looked at once-shunned neighborhoods positioned for a winning run. Like any other money-making venture, the goal is to buy low and sell high while earning some income in the meantime. And I think investing in Bronx rental properties deserves serious consideration. Here’s why I feel the love for the northernmost of the five boroughs.
Investing in Bronx Rental Properties
No secret formula exists here. The Bronx’s newfound popularity mainly stems from its proximity to Manhattan and a number of other plusses. Climbing rents, reduced crime rates, an influx of capital—in addition to location and value— all play a role in a successful real estate investment strategy.
Crowding Home Plate
I’m no genius but it’s not difficult for me to see the benefits of investing in a borough that borders Upper Manhattan. There’s been a logical progression of dollars finding their way outside the centerpiece of New York City. As demand—both foreign and domestic—continually exerts its force upon Manhattan, hungry home buyers rush to find prices that haven’t yet been pushed through the roof. The Bronx appears headed toward the upper reaches and rising median home prices, presenting opportunities for landlords who have the resources to throw their hats in the ring.
Rents on First
I need to analyze market movements. I can’t jump headlong into the home buying flux if I don’t run the numbers, and I’ve found a pretty positive trend in the Bronx. One of the factors I look at involves cap rates: a rate of return derived from dividing net income by the market value of a rental property. Cap rates in the Bronx have hovered around the mid-five percent range in contrast to Manhattan figures that saw a rate of approximately 3.5%. One can look at this phenomenon in two ways: Bronx rents have neared a top or Manhattan home prices rise so fast that monthly cash flows can’t keep up. Regardless, current investment plays north of Harlem are a good bet.
Developers Look to Score
Those investors who have large capital sums at stake tend to perform their due diligence. Arranging financing for multi-million dollar housing projects, both lenders and borrowers want assurances that occupancy rates will persist and debt obligations will be met. No guarantees can be made, but if the heavy hitters decide to shell out significant dollars in the Bronx, why shouldn’t individual investors do the same? Considering the billions of dollars that have been pumped into the borough in recent years, all signs point to go. But beware, the aforementioned cap rates may signal that Bronx rental prices could have peaked and the search for value might best be continued elsewhere.
Safe at Third
No one wants to feel threatened, especially in their home digs. Crime rates make up one of the most impactful components of livability scores. After all, what’s the sense of purchasing rental properties where doubt persists about personal safety? The Bronx crime rate has seen a marked decline in the past 28 years. One of the more telling indicators of eased anxieties revolves around attendance at Yankee Stadium: just as many fans took in night games in 2017 as they did daytime affairs. If the Bronx continues to build that trust, then baseball enthusiasts—and investors—will surely come.
That Winning Run
Let me finish by saying that I’m a diehard San Francisco Giants fan. However, when it comes to success, I’ve never been one to discriminate. I recognize that victories on the baseball field and in the real estate arena result from a tried-and-true formula. That’s why I teamed up with HomeVestors® to become an independently owned and operated franchisee. You see, winning real estate investment strategies require a diverse pool of talent, and that’s what I got when I first started buying investment property in New York City. I was paired up with an experienced Development Agent and proven “We Buy Ugly Houses®” marketing campaign have helped me transition from the sandlot to the big show.
Contact HomeVestors to see how it might be a game-changer for you, too.
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