Five ways investors
come unstuck
Drawn from the deals people bring us after the fact. Every one of these was visible before contract.
Before you read on
- Patterns drawn from real enquiries. Nothing here identifies a specific transaction.
- This is not legal or tax advice.
1Buying on the gross yield
The most common of the five. An 8% headline becomes under 4% once the costs that always arrive are back in.
| Line | Per year | Note |
|---|---|---|
| Rent, fully occupied | $24,000 | 8% gross on $300,000 |
| Property tax | −$5,400 | 1.8% effective |
| Management | −$2,400 | 10% of rent |
| Vacancy and turnover | −$1,200 | 5% |
| Repairs | −$1,900 | 8% of rent |
| Insurance | −$1,400 | |
| Net | $11,700 | 3.9% |
2 – 5The other four
The entry yield gets modelled and the sale does not. In markets where the resale buyer is a local owner-occupier, a sale can take six months or more. Non-resident sellers also face FIRPTA withholding of 15% of the gross price, reconciled at filing.
Federal, state and local property tax all apply, and the effective rate varies by a factor of five across the country. Investors who model a Texas yield on a California tax assumption get a number that never existed.
For a property held at distance, the management company is the investment. Whether their repair quotes are reasonable and how fast they re-let a vacancy shows up directly in the net. Interview candidates before the offer, not after closing.
Two identical apartments at the same price can carry completely different liabilities. If the reserve fund is short, the special assessment arrives after you own it. Read the minutes and the financial statements before contract.
ChecklistWhat to confirm before contract
| Check | Why it matters |
|---|---|
| Building financial statements and board minutes | A short reserve fund becomes your special assessment. |
| Recent closed sales, not asking prices | Asking prices tell you what sellers hope for. |
| Vacancy rate and days on market locally | Confirms the rent assumption is real. |
| The actual property tax bill and reassessment history | Assessments reset, sometimes sharply, after a sale. |
| Two or three management quotes | Fixes the largest recurring cost before you commit. |
| The tax position on exit | Cheaper to design at the start than to fix at the sale. |
Let’s talk first
Send us a deal you are weighing. If the numbers do not work we will tell you, including on properties we are not selling.
RELATED GUIDES
Recent transactions
A sample of the sales, purchases and rentals we acted on in 2025 and 2026.
Real estate brokerage services are provided through R New York.
Important notice
The figures on this page are general information as of August 2026 and do not represent an offer, a quote, or a guarantee of any transaction terms. Reinvent NY does not provide legal, tax, or investment advice. Confirm anything material with an attorney and a CPA before you act on it. Nothing here is a solicitation to invest, and no return is promised. Real estate brokerage services are provided through R New York.