Manhattan As a Buyer’s Market in 2025
Now is the time to invest in NYC real estate - especially the Manhattan market, which has been going through consequential changes of late.
Manhattan’s properties have remained a beacon of high status, wealth, and long-term investment value for decades. Even well-established investment pros have consistently found it a challenge to secure one of these properties under reasonable terms.
The last year has seen shifting market dynamics leading to an unprecedented surplus in inventory, causing property prices to fall and turning Manhattan into a buyer’s market for the first time since Covid. What’s different between 2020 and now, however, is that you can generate real ROI with your real estate.
By leveraging the increasing demand for furnished rentals in NYC, you can put a new investment property to work immediately. There are more business travelers, digital nomads, and professionals relocating to the city than ever before. Owning real estate gives you a rare opportunity to leverage your investment as a flexible housing option. This post will explore the state of Manhattan’s real estate market and give you some ideas for maximizing returns on your property.
Manhattan’s Real Estate Market: A Breakdown
How Economic Uncertainty Creates Opportunity
After years of rising property prices, Manhattan’s real estate market has experienced a downward shift. Factors such as economic uncertainty, rising interest rates, and post-pandemic lifestyle changes have contributed to a slowdown in demand. The result has been price reductions for many high-end properties, offering a rare chance for investors to acquire prime real estate at a relative discount.
In November 2024, Manhattan home prices experienced a 4.4% decline year-over-year (Redfin). Luxury properties have been hit even harder, with some high-end units experiencing a sales decline of nearly 20% (Mansion Global). This softening of prices gives investors the upper hand in negotiations and the ability to lock in properties below previous market highs.
Inventory Surge Benefiting Buyers
In addition to falling prices, the inventory of available properties has significantly increased. When there’s high demand (which is often the case in NYC), Manhattan’s real estate market often faces inventory shortages, leading to bidding wars and higher prices. But with more units on the market, investors have more options and more negotiating power.
Sellers who have properties that have been sitting on the market for extended periods are more motivated and likely to make deals, offering concessions like price reductions, closing cost assistance, and renovation credits. This increased supply of properties allows investors to be more selective, ensuring they acquire properties that fit their exact investment strategy.
Will the Prices Last?
While current market conditions are favorable for buyers, experts are divided on how long they will last. Some analysts believe that rising interest rates and broader economic uncertainties may continue to suppress demand, keeping inventory high and prices low for the foreseeable future.
Others project that as the economy stabilizes and consumer confidence returns, demand for Manhattan properties will increase, leading to a return to form for NYC’s property market. Things can change quickly, so if you’re in a position to take advantage of these market conditions, you’ve got an excellent opportunity staring you in the face.
Furnished Monthly Rentals: Maximizing Your Manhattan Property’s ROI
Acquiring Manhattan real estate gives you many potential paths to pursue. You may decide to sit on the property before flipping it when prices increase. You could also become a landlord and find long-term tenants to see stable returns over the long term. The option that gives you the biggest returns in the shortest time frame, however, is to turn your property into a furnished monthly rental.
Turning your investment property into a mid-term rental is a great way to gain instant and steady returns from your property. The thing is, New York City has some of the strictest regulations governing short-term rentals, including those listed on platforms like Airbnb. In most cases, renting out an entire apartment for less than 30 days is illegal unless the owner is present.
Furnished monthly rentals fall outside the short-term rental category and avoid the many regulatory hurdles. By offering leases of 30 days or more, investors can remain compliant with the law while still capturing the benefits of higher rental yields.
Furnished Monthly Rental Yields Compared to Long-Term Leases
The most compelling reason to invest in furnished monthly rentals is the potential for higher rental yields. Traditional long-term leases often lock landlords into fixed monthly rent for 12 months or more. In contrast, furnished rentals operate similarly to short-term vacation rentals, allowing landlords to adjust rental rates frequently to reflect market demand.
For instance, a property that might rent for $4,000 per month on a long-term lease could generate $6,000 to $24,000 as a furnished rental, depending on the property, area, season, and demand. Furnished rentals typically command a premium due to the added convenience of furniture, utilities, and flexible lease terms.
Potential Tenants Everywhere
With the rise of hybrid and remote work, there’s been an increase in demand for flexible living arrangements. Professionals who previously had to live close to the office are now seeking rental options that allow for short-term flexibility. This trend has led to a surge in demand for furnished, shorter-term apartments in major cities like New York City and, in particular, Manhattan.
Business travelers, tech workers, medical professionals, and international executives are among the key demographics for furnished monthly rentals and often take them at premium rates. As more people embrace the remote work lifestyle, the demand for flexible, high-quality living spaces is unlikely to subside.
The sheer variety of potential tenants reduces the risk of long vacancies and provides more consistent cash flow. These tenants often come from higher income brackets as well, so the likelihood of timely payments is also greater.
Opportunity in Turnover
You may be thinking that the high turnover nature of this model may sound like a drawback, but it’s actually a benefit in the furnished rental model. Shorter stays mean landlords can adjust rates more frequently, capturing seasonal price increases and adapting to market shifts. For example, rents during the summer months or peak travel seasons can be significantly higher than during the winter.
Additionally, since furnished rental contracts often operate on a month-to-month basis, landlords have the flexibility to increase rents as market conditions change. If property values or rental demand rise, landlords can immediately capitalize on the opportunity, unlike traditional leases where rent increases must wait until lease renewal periods.
Tax Benefits and Write-Offs
Operating a furnished rental can also provide significant tax advantages. Investors in New York can deduct expenses related to furniture, utilities, cleaning services, marketing, and management fees on their state tax forms. Moreover, under these circumstances, mid-term rentals qualify as business income, allowing for other deductions under IRS guidelines.
If managed correctly, the property’s expenses – including depreciation – can significantly offset taxable income, reducing the overall tax burden for investors. These are important considerations, but it’s best to consult a tax advisor to fully understand the potential benefits and how to structure the property investment for maximum tax efficiency.
Optimizing Your Furnished Monthly Rental
Operating a furnished monthly rental in Manhattan requires strategic planning, attention to detail, and a focus on guest experience. Here’s a short guide on how to do it successfully so you can maximize your rental income:
Prepare the Property
Start by furnishing the unit with high-quality, durable furniture that balances style and functionality. Include essential items like a comfortable bed with hotel-quality sheets, as well as a sofa, dining table, chairs, and smart storage solutions. Equip the kitchen with appliances, cookware, and utensils, and ensure the bathroom has fresh linens, toiletries, and cleaning supplies. Aim for a modern, neutral aesthetic that appeals to a broad range of tenants, especially the various professionals mentioned above.
Set Competitive Pricing
Research comparable furnished monthly rentals in the area to determine a fair market rate that also accounts for your property’s unique features. Things like accessibility to transit and local amenities are crucial for driving interest from renters. The more interest you’ve got, the higher your monthly rates can go.
Adjust these rates seasonally or based on demand fluctuations. Consider charging a premium for peak months when demand is higher. Striking the right balance between seasons is key to keeping tenants in your property and maximizing income year-round.
Market the Rental
List the property on high-traffic rental platforms and Manhattan’s more niche listing websites. Highlight key features of the property, like central location, modern amenities, and flexible lease terms. Always use professional photography and create a compelling property description to attract attention.
Screen Tenants
Conduct background checks and verify employment or financial stability to ensure you’re always getting reliable tenants. Since leases are typically month-to-month, it’s essential to prioritize tenants who can pay on time.
Manage Guest Experience
Provide fast, responsive communication before, during, and after a guest’s stay. Ensure smooth check-in and check-out processes and maintain a clean, well-stocked unit. It’s also important to have a property manager available to tackle your tenants' needs as they arise.
When you provide an optimal guest experience, your guests are more likely to recommend your rental to other professionals. Believe it or not, word-of-mouth referrals, in addition to 5-star reviews, is a great way to grow your rental and keep vacancy rates down.
Hire a Property Manager
For hands-off management, hire a property manager to handle tenant communication, property maintenance, and rent collection. They can optimize your rental strategy and maximize ROI while saving you time and effort.
Cityami specializes in mid-term rental management for property owners across New York City. We offer effortless solutions for property owners to generate cash flow through various housing platforms. Our marketing practices ensure the highest visibility to help you maximize your returns.
When you choose our Full-Service Rental Management solutions, we’ll manage every aspect of the rental on your behalf, from marketing to maintenance. If you’re a busy investor who wants to grow your portfolio but don’t have the time to deal with the operational side of things, we’ve got you covered.
Don’t wait until the market shifts again. Invest in your Manhattan property now and let us help you turn it into the centerpiece of your investment portfolio. Ready for a 15-minute chat with an expert? Click here to schedule your no-obligation consultation.