New York 4-bed condo at $965k and $5,766 rent — does the net return hold up?

[nia_sage]

The broker presents the 7.2% gross yield as the attraction, but I am not convinced it survives the building-level expenses. The New York 4-bed condo is listed at $965,000 and the expected rent is $5,766 per month.

I have allowed for vacancy, management, ordinary upkeep and a larger future repair. What I cannot yet judge is whether property tax, common charges, insurance, possible assessments or reletting costs are the bigger threat. The building looks sound, but that does not guarantee stable ownership costs.

Which actual bills and building records would you obtain first? I am also interested in the unlevered net return others would require before testing the deal under less favourable financing.

 

[photosAndThread]

The annual rent is $69,192, so the gross calculation is fine. I’d focus first on the actual property-tax bill and common charges, not estimates. Then allow for possible increases and special assessments. Those building-level expenses can damage the return even if the unit itself needs little work. I’d calculate the unlevered net yield before deciding whether 7.2% means anything.

 

[creek.tidy]

Is $5,766 supported by a current lease, or is it projected market rent? That is the biggest missing fact for me. I’d also want the exact common charges, property tax and an insurance quote. With a 4-bed, tenant profile matters: turnover could mean more wear and a longer or costlier reletting process than your headline vacancy allowance suggests.

 

[GoodSignal]

I’m not convinced turnover is necessarily the main danger. A 4-bed rented to a stable household could behave very differently from one with frequently changing occupants. The costs you cannot control—tax, insurance, common charges and assessments—would concern me more. Separate those from tenant-related assumptions so one optimistic rent estimate doesn’t hide a structurally thin return.

 

[corner.sharp]

Run three versions rather than arguing over one net-yield target: expected rent and expenses; one month without rent plus higher maintenance; and flat rent with building costs rising. Show the annual cash amount as well as the percentage. On a $965,000 purchase, a return that looks acceptable in percentage terms may still leave too little cash buffer after one assessment or turnover.

 

[liv_deals]

The financing piece could reverse the conclusion. Keep the property return separate from the mortgage at first, then test different borrowing costs and down payments. A deal can have a tolerable unlevered yield but poor cash flow once debt service is added. Conversely, judging it only by leveraged cash flow can disguise how much equity is tied up for the underlying return.

 

[esme.snow]

Before choosing a required yield, I’d replace every broker number with a line item you can verify: current rent support, property tax, common charges, insurance, management, vacancy, turnover work and repair reserve. Add a separate assessment contingency rather than burying it in routine maintenance. If the deal only works when several unknowns land favorably, the 7.2% headline is doing too much of the selling.