At Platinum Properties we’ve always put an emphasis on serving the international community. The reason I first got involved with international students was when a family friend frantically called me and told me that their daughter had just arrived at JFK international and the broker who they paid the entire year of rent to was not picking up the phone and the number had been disconnected. I realized how vulnerable foreigners, especially students alone in the big city and their helpless parents overseas can be in this scenario. That’s why for the past 5 years, I’ve specialized in helping international students with their housing needs. We have built relationships with landlords that will accept our students and have simplified the procedures so that parents thousands of miles away can be a part of the process.
New York City is the number 1 destination in the United States for international students. Over 60,000 students enroll at schools from Columbia and NYU to language schools in Herald Square for a chance to make it in New York. These students not only add to the cultural diversity and awareness in New York, but they (along with their families) pump $2.3 billion into the state’s economy, and that number continues to grow.
A staggering 29% of the entire Parsons New School student body is made of international students. NYU and Columbia both put their international student tally at about 12% of the total student body. The top 5 countries that sent the most students to New York were China, South Korea, India, Canada and Taiwan. These students have become an economic force and now their presence is being felt more and more within the real estate market.
Most international students are unable to qualify for an apartment based on the typical requirements such as income and credit. In order to secure an apartment, international students have been asked to pay either a substantial security deposit or the entire year upfront. Most have no problem doing this, but the but biggest obstacle comes in the form of rent stabilized apartments that are littered throughout Manhattan. These rent stabilized apartments are prohibited from collecting upfront rent or additional security. To fill in the gap, companies such as Insurent are thriving. While most New York landlords will not accept a guarantor from abroad, Insurent will review their paperwork and if everything checks out and you pay their a fee (typically 110% of 1 months rent), they will guarantee the lease for the international students.
While many students rent apartments, some are lucky to have parents purchase apartments for them. Because most landlords will require the entire year of rent upfront, if the international student is planning on attending school for 4 years and possibly more for graduate school, it becoming more and more clear that purchasing an apartment is the most sensible option. For a studio apartment with a rent of $2500, that would equate to $30,000/year paid upfront. For an undergraduate student that could mean $120,000 (without taking into account the increases in rent from year to year) in 4 years. Because of the cost of renting in New York, many parents are exploring the option of purchasing condos for their children instead. Because governments are more lenient on fund transfers if a child is attending school overseas, savvy investors are using the loophole to invest in multiple apartments.
Last month, we hosted an event for Korean international students to celebrate the Mid-autumn festival with us. If they were in Korea they would have spent the 3 day holiday with family and friends while enjoying traditional food. Since they couldn’t do that, we hosted an event for them to come to our office to spend time with other students while our sponsors generously provided us with all the traditional fare that they would have missed out on. We plan to host a similar event for Thanksgiving in November so the same students can also experience a traditional American Thanksgiving.
This summer an interesting story become a national headline: Chinese mother buys $6.5m condo for 2 year old daughter. While this is an extreme case, this type of story is becoming less of an anomaly and more common than ever before. We’ll see how it plays out in the coming year but one thing can be certain, New York will continue to be a major competitor for attracting international students, and that is only positive for the real estate market.
