Rental deal in New York: $1,140,000 purchase, $4,490/month — sanity check / sold-price history

[nia_sage]

I’m assessing a New York 1-bed serviced apartment at $1,140,000, with expected rent of $4,490/month. That gives a headline gross yield of roughly 4.7%. The building appears sound, and I’m checking sold-price history, but financing could turn a marginal deal negative. My model includes vacancy, management, routine maintenance and a larger-repair reserve. Which local cost am I most likely understating—property tax, insurance, building charges or turnover—and what net yield would justify the risk for you?

 

[xavi_flint]

Building charges and property tax would be my first concern, especially because neither is visible in the 4.7% headline number. I’d want the actual unit-level bills and any history of special assessments, not estimates from a listing. Personally, I would want around 4% net before financing; if normal expenses push it far below that, leverage only makes the deal more fragile.

 

[OtisCove]

What exactly does the $4,490 represent: rent under a normal lease, or gross serviced-apartment revenue before cleaning, booking and operating costs? That distinction could materially change management expense, vacancy and tenant turnover. I’d also clarify which services are included in the building charges and whether the operating model is permitted by the building. Without those answers, the yield comparison is premature.

 

[GoodSignal]

I wouldn’t use a fixed net-yield hurdle until the financing is modeled, so I partly disagree with Mohammed’s 4% test. Run unlevered and leveraged cases separately, then stress lower occupancy, higher insurance, one turnover and a larger repair in the same year. Get current tax, insurance and building-cost figures in writing, and compare the asking price with genuinely similar closed sales. If cash flow survives only at full rent with no surprises, I’d pass.