Inheriting a fully paid NYC rental yields less than 1% net cashflow. Mortgage financing worsens returns. Rising costs, vacancies, and legal fees risk losses. Is real estate actually profitable?
In my personal experience, owning a mortgage-free property in NYC doesn’t guarantee a strong cashflow due to substantial operating expenses that are often underappreciated. High property taxes, strict regulations, and increasingly expensive maintenance and management fees are major factors that consume a significant portion of rental income. Additionally, vacancies can disrupt the steady inflow of cash, making it difficult to build reserves. Despite the absence of mortgage debt, these operational challenges result in diminished net returns, which is a common scenario in NYC’s competitive real estate market.