What Rental Yields Look Like in Williamsburg

Thinking about buying in Williamsburg and renting it out? You want clear, practical numbers before you write an offer. This guide breaks down how rental yields work, what affects returns in Williamsburg, and how to model your own deal so you can move confidently. You’ll leave with simple formulas, neighborhood-specific factors to watch, and a checklist to evaluate any property. Let’s dive in.

Rental yield basics

Gross rental yield

Gross yield is a quick, top-line comparison. Use the formula: annual rent ÷ purchase price × 100. If a unit rents for $4,000 per month, that’s $48,000 per year. On a $1,000,000 purchase, gross yield is 4.8%.

Net yield and cap rate

Net yield accounts for ongoing costs and vacancy. A common version is the cap rate: net operating income (NOI) ÷ purchase price × 100. NOI equals annual rent minus operating expenses minus a vacancy allowance. Investors compare cap rates across properties to understand income relative to price.

Cash-on-cash return

Cash-on-cash looks at your annual pre-tax cash flow divided by your cash invested. It includes financing terms, so two properties with the same cap rate can deliver very different cash-on-cash returns depending on the loan.

Vacancy allowance

Even strong urban markets experience turnover. Build in a realistic vacancy allowance when you run numbers. Testing 3% to 7% is a simple way to see how a brief gap between tenants can change your return.

Hypothetical yield walkthrough

Below are illustrative examples to show the math. These are not Williamsburg averages. Always replace with building-specific numbers.

Condo example: simple math

Assume a condo purchase at $1,000,000. The unit rents for $4,000 per month, or $48,000 annually. You estimate expenses and vacancy as follows:

• Property taxes: $6,000
• Insurance: $600
• Condo common charges: $7,200
• Maintenance and repairs: $1,500
• Property management at 8% of collected rent: $3,840
• Legal, accounting, admin: $300
• Capital expenditure reserve: $600
• Vacancy allowance at 5% of annual rent: $2,400

NOI calculation: $48,000 − $20,040 operating expenses − $2,400 vacancy = $25,560. Cap rate: $25,560 ÷ $1,000,000 = 2.56%.

Now layer in financing to see cash-on-cash. With 25% down ($250,000) and a $750,000 loan, annual debt service can exceed NOI at many current rates, producing negative cash flow. If you increase the down payment or secure more favorable terms, cash flow may improve. This is why condos often pencil primarily for long-term total return, not immediate income.

Small multifamily example: 3–6 units

Assume a 3–4 unit walk-up purchase at $2,000,000. Combined market rent is $12,500 per month, or $150,000 annually. Expenses and vacancy might include:

• Property taxes: $20,000
• Insurance: $7,000
• Utilities the owner covers: $8,000
• Maintenance and repairs: $10,000
• Property management at 8%: $12,000
• Legal, accounting, admin: $1,000
• Capital expenditure reserve: $10,000
• Vacancy allowance at 5%: $7,500

NOI calculation: $150,000 − $68,000 operating expenses − $7,500 vacancy = $74,500. Cap rate: $74,500 ÷ $2,000,000 = 3.73%.

With financing, cash-on-cash depends on your down payment and interest rate. Multifamily can offer higher operating income than a condo, but it requires active management and more capital planning.

Sensitivity check

Test a few levers to see how fragile or resilient your return is:

• Rent changes: ±5% rent can shift NOI and cap rate meaningfully.
• Vacancy: Test 3%, 5%, and 7% to see downtime impact.
• Expenses: Add 10% buffer for insurance or maintenance and retest.
• Interest rate: Check a 1% higher or lower rate to see cash-on-cash swing.

What drives yields in Williamsburg

Housing stock and unit mix

Williamsburg mixes older walk-ups, prewar tenements, converted industrial lofts, large waterfront condos, and mixed-use buildings. Studios and 1-bedrooms often command high per-square-foot rents, but total yield depends on entry price, common charges, and expected maintenance.

Rent regulation and tenant law

Many New York City apartments are rent stabilized. Stabilized units follow state and city rules on increases and registration, which can create steadier cash flow with less upside. If you consider a building with stabilized units, understand the regulations that apply to those apartments.

Short-term rentals

Whole-unit short stays under 30 days face broad restrictions in New York City. That limits the strategy of using short-term platforms to boost yield. Confirm local rules and enforcement trends before modeling any short-stay revenue.

New supply and development

Former industrial sites have been redeveloped into large rental and condo projects along the waterfront and key corridors. New supply can compress yields until absorption completes. Micro-markets within Williamsburg often move differently, so look at comps in the immediate sub-area.

Transportation considerations

Transit access is a core demand driver. Proximity to the L train and ferry service supports rent levels in certain corridors. Service disruptions or improvements can affect rent growth by block and by building, so factor any known transit changes into your risk assessment.

Operating costs to watch

NYC-specific costs can be material. Property taxes, building maintenance, insurance, utilities you cover, property management fees, and any condo common charges all reduce net yield. For condos and co-ops, review building financials and any assessments.

Financing and rates

High entry prices paired with higher mortgage rates lower cash-on-cash returns for leveraged buyers. Small rate moves can change outcomes. Run scenarios with multiple loan structures before you bid.

Micro-areas to compare

North Williamsburg

Blocks near McCarren Park and Metropolitan Avenue are popular for proximity to transit and amenities. Pricing often reflects that demand. Compare rents and sales on the same side streets rather than using broad neighborhood averages.

South Williamsburg

South Williamsburg along the waterfront features significant redevelopment and larger buildings. Newer product can carry higher common charges or taxes, which affect net yields. Check how concessions or lease-up activity near major projects may influence effective rents.

East Williamsburg

Bordering Bushwick and industrial zones, East Williamsburg includes a mix of residential and commercial properties. Price and rent profiles can differ from the waterfront. Underwrite block by block and verify zoning and use.

Condo vs small multifamily

Condos: pros and tradeoffs

• Pros: Simpler operations, easier resale, often lower direct maintenance since the building handles major systems. Financing and closing can be more straightforward for some buyers.
• Tradeoffs: Common charges and taxes can weigh on net yield. Some HOAs have leasing restrictions and fees. Yields tend to be in the low single digits in prime buildings.

Small multifamily: pros and tradeoffs

• Pros: Better control over expenses, potential for value-add and repositioning, and economies of scale across units. Often higher net yields than single condo units.
• Tradeoffs: More active management, higher capex planning, and greater regulatory complexity if any units are rent stabilized.

How to get reliable numbers

Use building-level documents whenever possible so your model reflects reality.

• Recent rent roll or signed lease for the unit(s)
• NYC Department of Finance tax bill and tax class
• Condo or co-op common-charge or maintenance statement, plus any assessments
• Utility bills if the owner pays water, heat, or electric
• Insurance quote for the specific property type
• Property management proposal with fee schedule
• Maintenance history and a capex plan or reserve schedule
• For rent-stabilized units, registration details and applicable rules
• NYC Department of Buildings records for permits and any open violations

Build three scenarios

• Optimistic: Slightly higher rent, lower vacancy, steady expenses.
• Base case: Market rent, 5% vacancy, conservative expense ratios.
• Conservative: Lower rent or concessions, 7% vacancy, higher expenses and interest rate.

Update numbers once you are in diligence. Convert advertised rent to effective rent if there are concessions. Align lease terms with your vacancy assumption.

What yields look like today

In prime Williamsburg condos and luxury new developments, gross yields are commonly in the low single digits. Reported cap rates tend to land in the low-to-mid single digits, reflecting strong demand and long-term appreciation expectations. Smaller multifamily buildings and walk-ups can offer materially higher gross yields and cap rates than individual condo units, but they come with more operating complexity and variable capital needs. Your actual return will depend on purchase price, expenses, and whether the building has regulatory or assessment factors that limit upside or increase costs.

Next steps

If you have a property in mind, run the simple yield math first. Then layer in real expenses, vacancy, and financing to see how sensitive your returns are. If the numbers hold up across scenarios, you can move forward with confidence.

Want a second set of eyes on your underwriting or access to current rent and sale comps by micro-area? Reach out to the The Heard | Khedr Team for a data-backed consult and a clear plan to evaluate Williamsburg opportunities.

FAQs

What is a reasonable rental yield in Williamsburg?

• Expect ranges, not a single number. Prime condos often show low single-digit gross yields with low-to-mid single-digit cap rates, while small multifamily can be higher depending on price, condition, and regulation.

How do rent regulations affect returns in Williamsburg?

• Rent-stabilized units follow rules on increases and registration, which usually means steadier cash flow with less upside. Understand the regulatory status of each unit before modeling rent growth.

Should I buy a condo to rent out or a small multifamily?

• Condos are simpler to operate and resell but face common charges and potential HOA leasing rules. Small multifamily can deliver higher net yields and control, with more hands-on management and capex planning.

Can short-term rentals boost my Williamsburg yield?

• Whole-unit stays under 30 days are broadly restricted in NYC. Model returns based on standard leasing unless you confirm a compliant hosting arrangement.

How do I account for renovation and vacancy in my yield model?

• Include an annual capex reserve for big-ticket items and test a 3% to 7% vacancy allowance. Convert asking rents to effective rents if concessions are offered.

How do mortgage rates change my expected returns?

• Higher rates increase debt service and reduce cash-on-cash. Test your model with rates 1% higher and lower to see how sensitive your cash flow is before committing.