Why Luxury Furnished Rentals are the Future of NYC's Housing Market
Why luxury furnished rentals are the future of NYC's Housing Market
How 30+ day NYC luxury rentals became one of the Big Apple’s most promising investments.
Table of Contents
- Quick overview of the NYC traditional and luxury housing markets
- Advantages of short term luxury rental apartments
- What investors should know about the future of short term luxury rentals
- Is a NYC 30+ day luxury apartment for you?
Over the past two years, post-pandemic New York City (NYC) has slowly found her footing. Industries have reopened, tourists have returned and many of the city’s oldest traditions are once again up and running. However, like many national points of interest, post-pandemic NYC has also seen the rise of new markets and unexpected opportunities – including a growing demand for 30+ day luxury rental apartments.
NYC has always been a busy, diverse hub for many. It is home to long-term business moguls, short-term contractors and the seasonal demands of a heavy tourist industry. These three facets of New York City create an ongoing demand for short-term, fully furnished rental properties – and the result of that demand is a series of new opportunities for potential homeowners.
Why 30+ day rentals are dominating the luxury housing market in NYC
A recent crackdown on short-term rentals in NYC has made 30+ day apartments for rent more important to the city’s housing market in a new, more obvious way. City officials uncovered a string of illegal short-termrentals with hazardous living conditions in late 2022. As a result, they signed the short-termrental ban to make living conditions more transparent, reasonable, and safe for future New York City tenants. The change should also benefit New York City rentals operated by reputable property owners.
However, the city’s recent ban has also created fresh opportunities – and a higher level of demand – for 30+ day luxury rentals. The short-term, fully furnished apartment is filling a new void in the housing industry. It is also an exciting, well-established field for first-time investors to explore. By the end of this article, you’ll have all the tools you need to understand the benefits, risks and opportunities that 30+ day rental properties create for owners and tenants.
Let’s take a look at the current NYC housing market – and how 30+ day luxury apartments are becoming one of the Big Apple’s most appealing investments.
Quick overview of the NYC traditional and luxury housing markets
March 2020 brought serious, unexpected change to the New York City housing market, and the result was an unusually high vacancy rate. Manhattan, which tends to hover around a 3% vacancy rate, increased to a 12% rate in March 2020 and peaked at 18% by the end of that year. However, a few weeks into 2023, Manhattan has solidly returned to the rates it saw before the pandemic – and the demand for housing only continues to increase across the city.
While the world has mostly returned to many of its pre-2020 habits in fields such as leisure, tourism and entertainment, it left a lasting mark on the global workforce. Statewide quarantines gave many companies a new perspective on the work-from-home model. Remote employment is an efficient, cost-effective choice for many businesses. It is safe to assume that cities like New York will continue to see a rise in work-from-home employees.
Also, the internet has made it easier for industry specialists to find consistent work as freelancers. Jobs like copywriting, voiceover and even programming are less likely to be hired as full time roles. The shifts towards remote employment and a “project-to-project” mentality have led to a new demand for flexible, short-term housing in NYC and across the United States.
Travel is reaching new highs as well. According to the U.S. Travel Association, domestic travel in January 2023 was up 4% from 2019, surpassing pre-pandemic rates. Points of interest like Broadway are open for business again. In 2022, a whopping 3,244,404 international travelers visited the United States – a 205% increase over the year before that.
Both of these patterns make the future very promising for 30+ day apartment rentals in NYC. Not only is the city a hub for business and tourism, but it also holds appeal for both domestic and international communities – especially in areas like Times Square and Central Park, which will always draw visitors. The high-end housing market is a natural, sophisticated response to many modern lifestyles. Tourists, contractors and business professionals live in a short-term world with flexible boundaries; they need housing that can be just as flexible as they are.
Salisbury II by Rove Travel | New York City
The current state of fully furnished 30+ day luxury apartmentrentals
While the nationwide housing market has been frustrating for many Americans, it has also created a new space for luxury rentals (and their owners) to market themselves as a solution. Sky-high mortgage rates have made many potential buyers choose to rent instead of purchasing property. NYC is no exception. In fact, 30+ day luxury rental apartments vastly outperformed traditional properties in Manhattan in 2022.
NYC happens to be a sweet spot for short-termrentals because it champions two particular kinds of industry: contract-based work, and short-term visits from offshore hires. Many of the largest global names in finance, communication, health, fashion, retail and media have central hubs in NYC. The city is also a hotspot for many stable industries that have year-round needs for short-term contractors. Tourist-fueled industries, such as the arts, sports and media, rely heavily on seasonal and short-term contract employees.
Speaking of tourists, in 2022, NYC boasted over 56 million visitors – just 12% shy of pre-pandemic levels. As tourist-driven industries continue to recover from the pandemic, and as they continue to draw guests from around the world, we should expect to see more people interested in fully furnished short-term apartments.
Why are traditional long-term leases struggling to keep up in NYC?
While short-term luxury rentals have made great progress in 2022, traditional long-term rentals are struggling to compete. The post-pandemic surge in remote work situations (and the flexibility they offer) has made many NYC tenants less interested in year-long leases. In other words, traditional twelve-month leases rely on a disappearing work model and lifestyle – at least, one that is rapidly disappearing in NYC. As a result, traditional rentals are becoming less appealing to many of the new residents moving there.
These changes have made it challenging for long-term leases to adapt to the current NYC housing market. They are great, however, for the owner of a 30+ day luxury rental apartment. Let’s look at what makes short-term luxury apartments so attractive.
ADVANTAGES OF SHORT-TERM LUXURY RENTAL APARTMENTS
How do 30+ day luxury rentals benefit tenants?
For tenants, one of the 30+ day luxury rental’s most obvious perks is convenience. Moving furniture, cookware and basic comforts across the country for a 8-week project in the Upper West Side, for example, is not cost-effective. In addition, tenants would have to add on extra time to furnish that one bedroom apartment. Fully furnished luxury apartments with 30+ day rental rates are actually a good fiscal move for individuals and corporations alike.
Fully furnished luxury apartments tend to come with a fully stocked kitchen, high-speed wifi, linens, and ideally in-unit washer and dryer. Rove Travel is an upscale, remote-work friendly property management company with beautifully designed homes. There are modern workstations with monitors and keyboards easily accessible for tenants to use during their stay, to make it possible to work, live, and travel without compromising on leisure, productivity, or luxury. Tenants even have access to a 24/7 concierge team. Rove properties, and most are pet-friendly, can be found throughout Manhattan and Brooklyn: Upper East Side, Midtown West, Chelsea, Flatiron, Gramercy, Tribeca, Wall Street, Union Square, Soho, West Village, East Village, Greenwich Village, and Williamsburg.
Short-termrentals are often more cost effective than traditional options – partially because they can be tailored to any length of stay, and partially because they eliminate the need to transport furniture and other personal items. They also make it easier for a tenant to personalize his or her living experience. The 30+ day luxury rental model often creates space for a more personal owner-tenant relationship than traditional rental situations do. The month-to-month nature of a short-term lease requires a different level of communication between the tenant and the owner. That often leads to relational awareness, letting both halves of the agreement feel more involved in the lease experience.
Finding a 30+ day luxury rental in NYC can be a simple process. If you are on the hunt for housing, you can click here to read more about finding a place that feels like home and fits your needs.
Workstation Setup - Monitor, Standing Desk, Ergonomic Chair at Salisbury II by Rove Travel
How do 30+ day luxury rental properties benefit their owners?
Tenants are not the only parties that benefit from a short-termrental situation. In many cases, the property owner benefits from the agreement just as much as the tenant. A 30+day luxury apartment owner has more control over when the property is occupied and how it is maintained. Short-termrentals also tend to sustain less wear-and-tear than traditional leases. Tenants with shorter stays have less time to create (and sustain) habits that might lead to property damage.
Although short-termrentals often require more time and attention for property owners, they also make the owner more aware of the property’s upkeep needs. Since the apartment experiences new beginnings all year, its owner often has a more direct awareness of when significant maintenance is required. Cleaning a property between each tenant might take more time and effort, but it also means that care is often preventative rather than reactive. If you’re seeking assistance with managing your investment home (or some might call it pied-e-terre), reach out to Rove Travel.
Short-term luxury apartmentrentals also create a more personalized experience for the property owner. While traditional apartments often service dozens (or even hundreds) of individual tenants, 30+ day luxury property owners can focus on a handful of connections. That means greater control over the owner-tenant experience, more chances to invest relationally and better awareness of the property’s occupants.
Finally, as an investment opportunity, short-term luxury apartments for rent will continue to be an integral part of the NYC market. Recent travel trends, workforce statistics and post-pandemic patterns of behavior in NYC all predict that the demand for housing will continue to grow. Vacation rentals in particular can pose serious benefits to a luxury apartment owner – and lead to serious returns.
For potential property owners, that means that investment properties will become hotter commodities in the near future. Click here to find out if now is a good time for you to invest, and or reach out here if you’re ready to find your next property.
WHAT INVESTORS SHOULD KNOW ABOUT THE FUTURE OF SHORT-TERM LUXURY RENTALS
The 30+ day rental market in NYC is full of promise, and recent housing trends seem to paint a good future for both short-term luxury tenants and owners. And in general, the rental market isn’t going anywhere. Roughly two-thirds of current NYC residents are renters, and the recent new regulations will force many NYC newcomers to turn to 30+ day rentals as their most flexible housing option.
However, the market comes with its own set of challenges as well. The city’s recent ban on (less than 30 day) short-term rentals could mean that future investors experience more scrutiny from NYC governing bodies, especially as they work through the process of opening a new rental property. Potential 30+ day luxury apartment owners will need to pay closer attention to city regulations and laws.
Additionally, as the demand for short-term furnished rentals increases, so will the cost of vacant properties for sale. NYC officials reported 89,000 vacant rent-stabilized apartment units in 2022 at the height of the year’s vacancy; by the end of 2022, that number was cut almost in half. Investors are seeing the upward trend on 30+ day luxury rental apartments in NYC, and they want in. Aspiring property owners should expect the investing world to become more competitive in the upcoming year.
A third challenge that investors will face is unpredictability. Many statisticians did not foresee how much NYC has grown and changed since the pandemic – but even fewer foresaw the pandemic to begin with. The same could be said for the NYC housing market pre and post 9/11. Investments should always be made based on patterns of good evidence, but they can never be made on guarantees. Current events, economic realities and good old fashioned surprises can disrupt even the most demanding market, and NYC is no exception.
How should a potential investor respond to these challenges?
Fortunately, all of these setbacks can be addressed (and even overcome) with a little support, strategy and common sense. Companies such as Rove Travel can partner with potential 30+ day luxury apartment owners in NYC to help them navigate the processes that opening a rental property will require. Working with a professional will allow the investor to walk into property ownership with support and guidance. It also gives the homeowner a space for continued partnership and market perspective – someone to be honest when it is time to increase rent, add an amenity, or set a new boundary for tenants.
Investors with specific interest in New York City rentals should begin exploring the road to property ownership soon. Given the rise in demand, and the finite number of vacant properties for sale, it is likely that 30+ day rentals will become a very competitive field to invest in. Consulting a professional service will help you decide if – and when – investing in a NYC luxury apartment will be an advantageous move.
While there is no way to predict the future, and while every investment will carry an element of surprise, New York City has set itself up as a fairly low-risk city for new and latent investors looking to make a fresh start. If the past two years have proven anything, it is that the NYC real estate rental market knows how to rebound from surprises. Within two years, unsettling vacancy trends have been reversed, old industries have flourished, a new demand for 30+ day luxury rentals has emerged, and many of the city’s largest industries have learned how to become more future-minded. All of these trends point towards a future of innovation, resilience, and creative responses to plot twists – a future that should give great peace of mind to future property owners.
IS A NYC 30+ DAY LUXURY APARTMENT FOR YOU?
Luxury 30+ day apartments are the future of NYC rentals, and now is a great time for renters and owners to embrace the trend. The shift towards remote work, the resurgence of tourism and the short-term nature of many post-pandemic jobs make 30+ day luxury rentals a promising solution for workers and vacationers – and they provide a flexible, convenient option for tenants whose housing options changed when the city made its new regulations. Short-term furnished apartments also allow seasonal guests, like contractors and vacationers, to feel at home in NYC without absorbing the costs associated with moving their personal items across states (or oceans) to achieve a homelike environment.
For potential investors, fully furnished short-term luxury apartments might require a little extra work, but the payoff is high, and the demand for these properties will continue to increase. 30+ day rentals fill a need that the modern work and leisure models will only reinforce. They also provide the homeowner with benefits like flexibility, awareness and relational opportunity that traditional housing cannot replicate.
All in all, short-term luxury apartments, like NYC itself, have proven themselves forces to be reckoned with in a variety of climates and situations – not only stepping in to meet new housing needs, but creating innovative, future-minded solutions for homeowners, tenants and the industries they serve.
Are you ready to learn more about becoming part of the luxury rental market in NYC? Check out Rove-Travel to start your investment journey today.