If you are thinking of buying a Manhattan condo for investment with the objective to hold for rental income, here is one simple tip that is often overlooked.

In general, after paying common charges and taxes, you will gain an approximate 2% return annual. So an apartment that you acquire for $2 million will yield approximately $40,000 in net income. In some cases, you might have an even lower return.

One type of property that you might consider is an apartment with enough space to add an additional bedroom.  With the right design, you can rent an additional  bedroom/den for a higher income just due to the increase in bedroom count.  I had one listing where they converted the dining room to a 2nd bedroom and as a result we were able to rent the apartment for $4,200 whereas similar size apartments without the conversion were renting for around $3500. This made the return on the apartment based on the current market value closer to 3%.

You will need to see if the layout will allow it. Usually a space will need to have a minimum of 750-800 sqft to accomplish this but it will also depend on the current layout. A dining room or a dining area will be an ideal area to make the additional bedroom as long as there is a window and enough space.

With more people than ever sharing apartments and families remaining in Manhattan, this a nice way to gain an additional rental income and increase your yield on the property.