2f:[{"id":"6ccf99eb4fd540b21db7619bce0f7740b08d87d9bf30bcd63ecbd67b3843179cd327d5064997fcc40029106025676ffa7454116f230bacaa04f0f586dab91f30","href":"https://static.observableusercontent.com/files/6ccf99eb4fd540b21db7619bce0f7740b08d87d9bf30bcd63ecbd67b3843179cd327d5064997fcc40029106025676ffa7454116f230bacaa04f0f586dab91f30","name":"new-york-city-wide-8k-2z.jpg","type":"image/jpeg","lastModified":1715907178857.739,"size":4996967},{"id":"932bb07076dc42f70e4608b4ea1e28372cf945f7310ae82ac163b517f66e079bd8a251515a054de44809712b7f442238e307e2d8bf09fa5a4684eab42b27a5ad","href":"https://static.observableusercontent.com/files/932bb07076dc42f70e4608b4ea1e28372cf945f7310ae82ac163b517f66e079bd8a251515a054de44809712b7f442238e307e2d8bf09fa5a4684eab42b27a5ad","name":"Average Selling Price@4.csv","type":"text/csv","lastModified":1715907178857.739,"size":120},{"id":"06d70de75b754818b4ff424be6173d06a475426cfea9761ac4bf48ef5b0944f9161c871e402c07f542b3a9a9a6a9b2fe146f17adeab50ef625c720ec6d684630","href":"https://static.observableusercontent.com/files/06d70de75b754818b4ff424be6173d06a475426cfea9761ac4bf48ef5b0944f9161c871e402c07f542b3a9a9a6a9b2fe146f17adeab50ef625c720ec6d684630","name":"MAP FINALLLLL.jpg","type":"image/jpeg","lastModified":1715907178857.739,"size":117673},{"id":"5530a54c773d80bc81eff35f037166878d2f8510738a867d988fa47ac0301aeb9b02722e8cadfbed10caa9118ce76a84657b8189d2baee30713fac17a452c2d7","href":"https://static.observableusercontent.com/files/5530a54c773d80bc81eff35f037166878d2f8510738a867d988fa47ac0301aeb9b02722e8cadfbed10caa9118ce76a84657b8189d2baee30713fac17a452c2d7","name":"NY Realstate Pricing.csv","type":"text/csv","lastModified":1715907178857.739,"size":1376703},{"id":"db593eb7d3f28bbdf0ba00e52d45691a83f070863e22d4d7cd405c3b3091693ee8b2212301cf60c921c25e5a53004cc907127085806df400f74273db30070d9d","href":"https://static.observableusercontent.com/files/db593eb7d3f28bbdf0ba00e52d45691a83f070863e22d4d7cd405c3b3091693ee8b2212301cf60c921c25e5a53004cc907127085806df400f74273db30070d9d","name":"Original Dataset.csv","type":"text/csv","lastModified":1715907178857.739,"size":1407263},{"id":"b541921018f53c80b1783bbaecaf93f61f685ef75ec8a44178486e1d54c6846606536cedbb0ddd2b644d1be0334b3c6ce3ce5f6d988c5934c8adb7edda1061e4","href":"https://static.observableusercontent.com/files/b541921018f53c80b1783bbaecaf93f61f685ef75ec8a44178486e1d54c6846606536cedbb0ddd2b644d1be0334b3c6ce3ce5f6d988c5934c8adb7edda1061e4","name":"Rental Yield.png","type":"image/png","lastModified":1715907178857.739,"size":175819}] 2d:{"title":"Unlocking The Hidden Potential Of New York City Real Estate: Why Brooklyn and Manhattan Deserve Your Investment For Rental?","cells":[{"id":838,"value":"","pinned":false,"hidden":false,"mode":"html"},{"id":815,"value":"displayCaution(\"This report exemplifies high-quality work from a previous year, earning a high grade. It features effective visualizations, clear writing, and thorough analysis. The views, analyses, and conclusions are those of the notebook authors and are not endorsed by FS or the course instructor. The author names are removed for anonymity.\")","pinned":false,"hidden":false,"mode":"ojs"},{"id":835,"value":"","pinned":false,"hidden":false,"mode":"html"},{"id":0,"value":" \n# Unlocking The Hidden Potential Of New York City Real Estate: Why Brooklyn and Manhattan Deserve Your Investment For Rental? ","pinned":false,"hidden":false,"mode":"md"},{"id":525,"value":"html`

`","pinned":false,"hidden":false,"mode":"ojs"},{"id":11,"value":"As an individual seeking investment opportunities, what could be a good investment with a stable annual return?\nA simple and very common answer would be real estate. You buy a property, you rent it and you receive your passive income. ","pinned":false,"hidden":false,"mode":"md"},{"id":50,"value":"Now the question is, which city?","pinned":false,"hidden":false,"mode":"md"},{"id":13,"value":"## New York City ","pinned":false,"hidden":false,"mode":"md"},{"id":34,"value":"NY is the most populous city in the United States with an estimated population of 8,000,000 people.\nIt is usually described as the cultural, financial, and media capital of the world.","pinned":false,"hidden":false,"mode":"md"},{"id":39,"value":"### The 5 Boroughs of NYC ","pinned":false,"hidden":false,"mode":"md"},{"id":58,"value":"html`

`","pinned":false,"hidden":false,"mode":"ojs"},{"id":52,"value":"Situated on one of the world’s largest natural harbors, NYC is composed of what we call, the five boroughs:\n- Brooklyn\n- Manhattan\n- Queens\n- Staten Island\n- The Bronx.","pinned":false,"hidden":false,"mode":"md"},{"id":85,"value":"## Our Methodology","pinned":false,"hidden":false,"mode":"md"},{"id":93,"value":"To support our choice of acquiring a property in NYC and then rent it, we decided to take a look at the 2019 Airbnb Listings in NYC and this was the dataset we obtained.","pinned":false,"hidden":false,"mode":"md"},{"id":108,"value":"#### Original Dataset","pinned":false,"hidden":false,"mode":"md"},{"id":96,"value":"Original = await FileAttachment(\"Original Dataset.csv\").csv({typed: \"auto\"})","pinned":true,"hidden":false,"mode":"ojs"},{"id":98,"value":"Since the dataset was split into neighborhoods and not boroughs, we have used Excel to clean and prepare our data. Our main goal was to find the corresponding borough for each neighborhood. Each one of the 186 neighborhoods was allocated to its borough. ","pinned":false,"hidden":false,"mode":"md"},{"id":106,"value":"For example, the 1st row in our table (F1=0) has Midtown as a neighborhood. Midtown is located in the Borough of Manhattan so its column 'neighbourhood' is changed to Manhattan.","pinned":false,"hidden":false,"mode":"md"},{"id":112,"value":"#### Final Dataset","pinned":false,"hidden":false,"mode":"md"},{"id":114,"value":"Final = await FileAttachment(\"NY Realstate Pricing.csv\").csv({typed: \"auto\"})","pinned":true,"hidden":false,"mode":"ojs"},{"id":132,"value":"#### Data Wrangling","pinned":false,"hidden":false,"mode":"md"},{"id":137,"value":"As we are only interested in Entire homes or apartments, we needed to filter our data and rename a few cells. For the rest of our report, we will be using the following table.","pinned":false,"hidden":false,"mode":"md"},{"id":124,"value":"NY_Real_Estate= aq.from(Final)\n .rename({'neighbourhood':'Borough'}) \n .filter(d=>d['room_type']=='Entire home/apt')\n .derive({days_occupied_in_2020:d=>365-(d.availability_2020)}) \n\t.objects()","pinned":false,"hidden":false,"mode":"ojs"},{"id":183,"value":"#### ➽ *Now let's see what makes of a real estate property a good investment for rental*\n ","pinned":false,"hidden":false,"mode":"md"},{"id":177,"value":"## First Requirement: High Rental Demand","pinned":false,"hidden":false,"mode":"md"},{"id":186,"value":"First requirement is a high rental demand and we can figure that out by computing the average occupancy rate for each borough, extract the average occupancy rate for NYC and then compare it to the worldwide average occupancy rate for Airbnb in 2019.","pinned":false,"hidden":false,"mode":"md"},{"id":247,"value":"#### Average Occupancy Rate for each borough","pinned":false,"hidden":false,"mode":"md"},{"id":624,"value":"We start by grouping our data into 5 different boroughs and then compute the average occupancy rates respectively.","pinned":false,"hidden":false,"mode":"md"},{"id":191,"value":"groupedData = d3.group(NY_Real_Estate, d => d.Borough)\n","pinned":false,"hidden":false,"mode":"ojs"},{"id":207,"value":"averageData = Array.from(groupedData, ([Borough, rows]) => ({\n Borough,\n averageDaysOccupied2019: d3.mean(rows, d => d['days_occupied_in_2019'])\n}));","pinned":false,"hidden":false,"mode":"ojs"},{"id":626,"value":"Plot.plot({\n width: 800,\n marginLeft: 80,\n y: {\n label: \"Average Occupancy Rate (%)\",\n transform: (d) => d / 365*100\n },\n x: {\n label: \"Borough\"\n },\n marks: [\n \n Plot.barY(averageData, {\n x: \"Borough\",\n y1: \"averageDaysOccupied2019\",\n sort: { x: \"y\", reverse: true },\n fill:\"#cfe2f3\"\n }), \n ]\n});","pinned":false,"hidden":false,"mode":"ojs"},{"id":260,"value":"#### Add average Occupancy rate for NYC and worldwide average occupancy rate","pinned":false,"hidden":false,"mode":"md"},{"id":292,"value":"NYC_average_occupancy_rate_green= 45.6","pinned":false,"hidden":false,"mode":"ojs"},{"id":295,"value":"Airbnb_worldwide_occupancy_rate_red= 23.4","pinned":false,"hidden":false,"mode":"ojs"},{"id":252,"value":"Plot.plot({\n width: 800,\n marginLeft: 80,\n y: {\n label: \"Average Occupancy Rate (%)\",\n transform: (d) => d / 365*100\n },\n x: {\n label: \"Borough\"\n },\n marks: [\n \n Plot.barY(averageData, {\n x: \"Borough\",\n y1: \"averageDaysOccupied2019\",\n sort: { x: \"y\", reverse: true },\n fill:\"#cfe2f3\"\n }),\n Plot.ruleY([NYC_average_occupancy_rate_green*3.65], {strokeDasharray: \"10\",stroke:'#6aa84f',strokeWidth:3}),\n Plot.ruleY([Airbnb_worldwide_occupancy_rate_red*3.65], {strokeDasharray: \"10\", stroke:'Red',strokeWidth:3})\n // Plot.text(averageData, {\n // x: 'The Bronx',\n // y: 5,\n // text: ['93% Higher'],\n // fontSize: 25,\n // fill: 'green'})\n ]\n});","pinned":false,"hidden":false,"mode":"ojs"},{"id":354,"value":"### ▲ 93% Higher ▲ ","pinned":false,"hidden":false,"mode":"md"},{"id":314,"value":"So overall ***NYC's average occupancy rate*** is 93% higher than ***the Airbnb worldwide average ***.","pinned":false,"hidden":false,"mode":"md"},{"id":650,"value":"Hence, we indeed have a very high rental demand.","pinned":false,"hidden":false,"mode":"md"},{"id":317,"value":" ➽ ***Now that we made sure that the NYC market is doing very well in terms of demand, let's talk profits: the metric used for that is called rental yield.*** ","pinned":false,"hidden":false,"mode":"md"},{"id":324,"value":"## Second Requirement: High Rental Yield","pinned":false,"hidden":false,"mode":"md"},{"id":327,"value":"Let's first define the Rental Yield.","pinned":false,"hidden":false,"mode":"md"},{"id":332,"value":"Rental yield is simply the difference between the income you receive from renting out your property minus the overall costs of your investment. It’s often expressed as a percentage and the higher the percentage generally means greater cash flow and higher return on investment. ","pinned":false,"hidden":false,"mode":"md"},{"id":334,"value":"Its equation is as follows:","pinned":false,"hidden":false,"mode":"md"},{"id":329,"value":"html`

`","pinned":false,"hidden":false,"mode":"ojs"},{"id":482,"value":"For Example:\n- You purchase an apartment for $600,000\n- You rent it out for $60 000 per Year\n- The rental yield = $60,000 / $600,000 = 10%","pinned":false,"hidden":false,"mode":"md"},{"id":341,"value":"To get the rental yield from our dataset, we divided the process in 3 steps:","pinned":false,"hidden":false,"mode":"md"},{"id":396,"value":"#### 1st Step: Average Property Price by Borough","pinned":false,"hidden":false,"mode":"md"},{"id":398,"value":"For this step, we have opted for a reliable external source: NYC governmental database.","pinned":false,"hidden":false,"mode":"md"},{"id":409,"value":"averageSellingPrice2019 = await FileAttachment(\"Average Selling Price@4.csv\").csv({typed: \"auto\"})","pinned":false,"hidden":false,"mode":"ojs"},{"id":416,"value":"Plot.plot({\n width: 800,\n marginLeft: 80,\n y: {\n transform: (d) => d/1_000 ,\n label: \"Average Selling Price in 2019 ( K $)\"\n },\n x: {\n label: \"Borough\"\n },\n marks: [\n \n Plot.barY(averageSellingPrice2019, {\n x: \"Borough\",\n y: \"Average_Selling_Price_2019\",\n fill: (d) => (d[\"Borough\"] =='Brooklyn' ? \"#f1c232\" :\n d[\"Borough\"] =='Manhattan' ? \"#b4a7d6\":\n d[\"Borough\"] =='Queens' ? \"#c27ba0\":\n d[\"Borough\"] =='Staten Island' ? \"#45818e\"\n :\"#e69138\") \n }),\n ]\n});","pinned":false,"hidden":false,"mode":"ojs"},{"id":343,"value":"#### 2nd Step: Annual Rental Income by Borough","pinned":false,"hidden":false,"mode":"md"},{"id":393,"value":"For this, we multiplied the average days occupied per borough by the average price per day.","pinned":false,"hidden":false,"mode":"md"},{"id":373,"value":"Plot.plot({\n width: 800,\n marginLeft: 80,\n y: {\n label: \"Annual Income in 2019 ($)\"\n },\n x: {\n label: \"Borough\"\n },\n marks: [\n \n Plot.barY(averageData_2, {\n x: \"Borough\",\n y: \"annualIncome\",\n fill: (d) => (d[\"Borough\"] =='Brooklyn' ? \"#f1c232\" :\n d[\"Borough\"] =='Manhattan' ? \"#b4a7d6\":\n d[\"Borough\"] =='Queens' ? \"#c27ba0\":\n d[\"Borough\"] =='Staten Island' ? \"#45818e\"\n :\"#e69138\") \n }),\n ]\n});","pinned":false,"hidden":false,"mode":"ojs"},{"id":443,"value":"#### 3rd Step: Rental Yield","pinned":false,"hidden":false,"mode":"md"},{"id":445,"value":"Now that we have our annual rental income and average property price per Borough, we can easily calculate our rental yield using the equation we mentioned above.","pinned":false,"hidden":false,"mode":"md"},{"id":455,"value":"let's first join our main dataset to our new table","pinned":false,"hidden":false,"mode":"md"},{"id":458,"value":"data_merged=aq.from(NY_Real_Estate)\n\t.join_left(aq.from(averageSellingPrice2019), [\"Borough\"])\n\t.objects()","pinned":false,"hidden":false,"mode":"ojs"},{"id":475,"value":"Plot.plot({\n width: 800,\n marginLeft: 80,\n y: {\n label: \"Rental Yield in 2019 (%)\"\n },\n x: {\n label: \"Borough\"\n },\n marks: [\n \n Plot.barY(averageData_3, {\n x: \"Borough\",\n y: \"RentalYield\",\n fill: \"#bcbcbc\"\n }),\n ]\n});","pinned":false,"hidden":false,"mode":"ojs"},{"id":495,"value":" ➽ ***Before making any observation, let's ask ourselves one question:*** ","pinned":false,"hidden":false,"mode":"md"},{"id":498,"value":"#### Why would someone invest in NYC Real estate instead of the US treasury bond?","pinned":false,"hidden":false,"mode":"md"},{"id":733,"value":"In fact, the US Treasury Bond is:","pinned":false,"hidden":false,"mode":"md"},{"id":501,"value":"- risk free\n- gives you stable returns\n- has more than 3% yield per year.","pinned":false,"hidden":false,"mode":"md"},{"id":503,"value":"And to answer this question, we compared the rental yields of NYC's boroughs to the adjusted US Treasury Bond Yield for 2019 which was equal to 3.14 % .","pinned":false,"hidden":false,"mode":"md"},{"id":510,"value":"US_Treas_Bond_Yield_2019_purple=3.14","pinned":false,"hidden":false,"mode":"ojs"},{"id":508,"value":"Plot.plot({\n width: 800,\n marginLeft: 80,\n y: {\n label: \"Rental Yield in 2019 (%)\"\n },\n x: {\n label: \"Borough\"\n },\n marks: [\n \n Plot.barY(averageData_3, {\n x: \"Borough\",\n y: \"RentalYield\",\n fill:(d) => (d[\"Borough\"] =='Brooklyn' ? \"#59ACBE\" :\n d[\"Borough\"] =='Manhattan' ? \"#59ACBE\"\n :\"#bcbcbc\") \n }),\n Plot.ruleY([US_Treas_Bond_Yield_2019_purple ], {strokeDasharray: \"10\",stroke:'#8e7cc3',strokeWidth:3}),\n \n ]\n});","pinned":false,"hidden":false,"mode":"ojs"},{"id":517,"value":"#### Results","pinned":false,"hidden":false,"mode":"md"},{"id":519,"value":"2 out of 5 boroughs ( ***Brooklyn*** and ***Manhattan*** ) outshine the 2019 US Treasury Bond Yield in terms of profit.","pinned":false,"hidden":false,"mode":"md"},{"id":743,"value":"#### Now someone could argue, Yes Brooklyn and Manhattan are more profitable but the US Treasury Bond is risk-free while Real Estate is always risky.","pinned":false,"hidden":false,"mode":"md"},{"id":745,"value":"But what most people ignore is that Manhattan and Brooklyn are almost risk-free as well in terms of real estate investment for several reasons:","pinned":false,"hidden":false,"mode":"md"},{"id":768,"value":"1. ***They are easy to rent out***: The two boroughs are the most populated and demand is constantly high even in the middle of crises (NYC closed 2020, the pandemic year, as the second highest rental market in the nation thanks to these 2 boroughs\n2. ***Properties appreciate in value continuously***: As land is extremely limited, The cumulative appreciation rate for NYC over the ten last years has been 79.16%\n3. ***A top notch infrastructure and a low crime rate:*** New York City has the most extensive network of streets, water mains, and storm and sanitary sewers.\n4. ***A home to many tourist attractions:*** New York is well known for many things, but one of them is easily its artistic prowess and the talent it homes. It's also a great spot for some huge, fascinating museums, and if you're always up for some peaceful contemplation and beautiful sights, this is a top spot.","pinned":false,"hidden":false,"mode":"md"},{"id":761,"value":" \n# Hence, Brooklyn and Manhattan Deserve Your Investment! ","pinned":false,"hidden":false,"mode":"md"},{"id":664,"value":"## Appendix","pinned":false,"hidden":false,"mode":"md"},{"id":721,"value":"#### Imports","pinned":false,"hidden":false,"mode":"md"},{"id":118,"value":"import {Wrangler, op} from \"@observablehq/data-wrangler\"","pinned":true,"hidden":false,"mode":"ojs"},{"id":827,"value":"import {displayCaution} from \"@mkfreeman/utilities\"","pinned":true,"hidden":false,"mode":"ojs"},{"id":779,"value":"#### Compute the average annual income","pinned":false,"hidden":false,"mode":"md"},{"id":365,"value":"averageData_2 = Array.from(groupedData, ([Borough, rows]) => ({\n Borough,\n annualIncome: d3.mean(rows, d => d.days_occupied_in_2019*d.price)\n}));","pinned":false,"hidden":false,"mode":"ojs"},{"id":723,"value":"#### Recalculate averages for the rental yields","pinned":false,"hidden":false,"mode":"md"},{"id":466,"value":"groupedData_2 = d3.group(data_merged, d => d.Borough)\n","pinned":false,"hidden":false,"mode":"ojs"},{"id":453,"value":"averageData_3 = Array.from(groupedData_2, ([Borough, rows]) => ({\n Borough,\n RentalYield: d3.mean(rows, d => d.days_occupied_in_2019*d.price/(d.Average_Selling_Price_2019) *100)\n}));","pinned":false,"hidden":false,"mode":"ojs"},{"id":755,"value":"#### Why did we choose the 10-year bond?","pinned":false,"hidden":false,"mode":"md"},{"id":757,"value":"We have compared our findings for each borough with 10 year average Treasury bonds in 2019. The data was taken from the Premier research Platform for long term investors . This was done in order to compare the premium on investments in different borrows and Screen the attractiveness of the returns. The greatest deterrent of direct investment in real estate is illiquidity. (Baum, 1994) and thus, we wanted to assess the premium investors may get by investing in different boroughs of New York.\nWe have selected a 10 year Bond as we assumed the duration of the real estate investments mostly corresponds to the same duration based on optimization of both fiscal and reinvestment benefits.","pinned":false,"hidden":false,"mode":"md"}],"files":"$W2f","stdlib":"1","titling":"auto"}