If one is to spend millions of dollars on an investment, it’s wise to do some research first. Just as there is only so much you can tell about someone from their resume, it’s important to know how a neighborhood stands up beyond the statistics. There are personal, subjective elements to every property that some buyers are finding they can only appreciate from living in the area first – by renting. A few months in a nearby flat can make all the difference when deciding where to buy.
To address this need, there is a new phenomenon that is popping amidst real estate in Manhattan known as condo-rental hybrids. By renting first, buying later, the selective investor has a chance to build a relationship with the management, to ease them into the buying transition. It also allows them to know exactly what to expect with their apartment, and the new neighborhood surrounding them.
Buying residential real estate in Manhattan can be an emotional affair, especially when families are involved. By easing into their new neighborhood, it eliminates some uncertainty and anxiety. Once a family has settled in, it becomes just a matter of paperwork to finalize the transaction.
Others prefer to rent in a nearby building. By taking a few months close by they are able to scope out potential weaknesses to use for bargaining advantage. Kim Kardashian and her party pals dance to loud music all night across the street? Strange smells from the back alley? Too close for comfort with the Occupy protestors? These become arrows for the quiver in the negotiation process. A shrewd investor knows his product inside and out, and that knowledge becomes key when striking down a realtor’s bluffs.
However, there has never been a worse time to rent. Rents are at record highs, and they keep getting higher, with the median rental price shooting up 7.9 percent from the same quarter last year. But, for someone looking for their primary home, then renting before you buy can be a very savvy thing to do. Keeping things in perspective, a few thousand dollars in a new neighborhood is a drop in the bucket for the serious multi-million dollar investor. A little reconnaissance to feel the pulse and some feet-on-the-street time could be the best investment they’ve ever made.