Are Brownstones a Good Investment? Pros & Cons
New York City brownstones are somewhat cultural icons, architectural treasures, and in many cases, smart long-term investments. In this guide, I’ll walk you through what it means to invest in a brownstone, with a focus on Manhattan and Brooklyn.
What is a Brownstone?
A brownstone is a townhouse or rowhouse clad in reddish-brown Triassic sandstone. Built between the 1840s and 1910s, most brownstones are found in historic NYC neighbourhoods like:
Park Slope
Fort Greene
Bedford-Stuyvesant
Harlem
Upper West Side
Greenwich Village
Cobble Hill
These buildings often feature Italianate, Neo-Grec, or Romanesque Revival details, with stoops, bay windows, and parlour levels. Most span 3–5 stories and offer anywhere from 2,500 to 6,000 square feet of living space.
Investment Appeal: Why Brownstones Come at a Premium
Scarcity Drives Value
There are a finite number of brownstones in NYC. With most buildings built before 1910 and landmarked, the new supply is virtually nonexistent, not just because it would be prohibitively expensive to build but because the material the original brownstones were made of (brown sandstone) is unavailable. What is left in the quarries of Portland, CT, is now expensive, fragile and challenging to work with (compared to modern materials). This fixed inventory, paired with rising demand for character-rich homes, in lieu of modern, quick build development, all but guarantees long-term appreciation. Brownstones are a product of their time, making them valuable and irreplaceable.
Land Ownership and Footprint
Unlike condos or co-ops, brownstones are fee-simple properties, meaning the owners hold title to the land, including the garden or backyard—an increasingly rare commodity in urban environments, as anyone who experienced COVID-19 might recall.
Flexibility
Brownstones can take on a few different forms—
Single-family residences,
Owner-occupied with rental units, a setup where the owner lives in one unit and rents out the others
Full income-producing properties
This versatility gives investors room to grow and adjust—whether their personal needs change or the market takes a turn, like in the early 20th century when many were converted into multi-family homes because of urban population growth and The Great Depression.
Tax Advantages
Owning a brownstone can come with valuable tax benefits, including:
Mortgage interest deductions
Depreciation (if part or all of the property is rented out,
Historic preservation tax credits, depending on the location and renovations.
Consult a tax advisor, as benefits increase with property use strategy.
The Real Cost of Ownership
Maintenance and Restoration
Owning a brownstone comes with unique responsibilities, especially in maintenance and restoration. These older buildings often need more attention than new construction. Common issues among these historic buildings include:
Crumbling or cracked brownstone facades
Outdated plumbing, electrical or HVAC systems
Roof and flashing repairs
Lead paint or asbestos may require professional remediation.
Annual upkeep isn’t cheap. It’s not uncommon for maintenance costs to run $15-30 / square foot, adding up to $40,000 or more each year for larger homes.
Big-ticket updates
Big-ticket updates—like renovating kitchens, bathrooms, or installing new HVAC systems—can be costly in a brownstone. Depending on the scope of work and any landmark preservation rules, costs can range from $500 to $900 per square foot. Planning ahead and budgeting for these major improvements is essential for long-term ownership.
Regulatory Restrictions
Many brownstones are located in designated historic districts, which means they fall under the oversight of the Landmarks Preservation Commission (LPC). As a result, owners face additional rules and approvals, such as:
Needing special permits for any exterior work
Restrictions on replacing windows or doors
Limitations on adding solar panels, extensions, or using non-original materials
These regulations can lead to delays, added costs, and stricter renovation timelines—all of which can impact your return on investment.
Liquidity and Selling Timeline
Brownstones—especially high-value ones—often take longer to sell than smaller apartments or condos, particularly in a changing market. They’re less liquid, which means you may not be able to sell quickly if needed. To attract the right buyer, it’s crucial to have a well-executed strategy for staging, marketing, and pricing.
Rental Income Potential: Passive Revenue or Full-Time Job?
Brownstones with rental units can offer a steady stream of income, especially in high-demand neighborhoods like Bed-Stuy, Harlem, and Carroll Gardens. Here’s a look at typical rental income and cap rates by area:
Area
Avg Monthly Rent (1-BR)
Cap Rate
Bed-Stuy
$2,500–$3,200
3.5–5.5%
Fort Greene
$3,200–$3,800
3.0–4.5%
Upper West Side
$3,800–$5,000
2.5–3.5%
While the potential for rental income is strong, the actual return depends on a range of factors—including vacancies, tenant turnover, operating costs, and management fees.
It’s also important to understand New York City’s complex landlord-tenant laws. These include rent stabilization rules and “just cause” eviction protections, which can significantly impact how you manage the property and your overall return.
For some, it’s a solid passive investment. For others, it can feel more like a hands-on business.
Case Study: Bed-Sty Brownstone Purchase
Initial Purchase – $2.1M
Renovation Cost – $650k
3-Family Setup: Owner + 2 Rentals
Gross Rental Income: $78k/year
Net Income After Expenses: $46k/year
Appraised Post-Reno Value: $3.2M
Brownstone vs. Condo: Which Is the Smarter Long-Term Investment?
Feature
Brownstone
Condo
Ownership
Simple Fee
Shared (HOA or co-op board)
Maintenance
Owner responsible
HOA-managed
Appreciation
High in gentrifying areas
Slower in saturated markets
Customization
Full control
Restricted by HOA rules
Entry Cost
Higher (typically $2M+)
More accessible (~$1M+)
Liquidity
Lower due to niche market
Higher resale volume
Over the long term, brownstones often outperform condos when it comes to both property appreciation and rental income—particularly in historic neighborhoods that are experiencing revitalization. Their charm, character, and scarcity tend to hold strong value, especially as demand grows in emerging areas.
When Does a Brownstone Make Sense as an Investment?
Best-Case Scenarios
Brownstones tend to deliver the most value under the right conditions. Ideal scenarios include:
Holding the property for the long term (7–10+ years) to maximize appreciation
Living in one unit while renting out others to offset costs
Including the property in a tax-advantaged portfolio to benefit from depreciation
Having a clear vision for restoring historic details or creatively repurposing the space/s
These approaches can help investors make the most of both the financial and lifestyle potential of brownstone ownership.
Not Ideal If:
A brownstone may not be the right fit if:
You’re looking for a low-maintenance or fully hands-off investment
You plan to sell within a short time frame (less than 5 years)
You don’t have cash reserves for unexpected repairs or upgrades
You’re not familiar with New York City’s complex building codes and preservation regulations
In these cases, other property types may offer a more practical path.
Final Verdict: Are Brownstones a Good Investment?
Yes, when purchased and managed with a clear strategy. Brownstones offer a rare blend of architectural charm, historical significance, and long-term equity growth. But they’re not without their demands. Maintaining and managing these properties requires substantial time, capital, and know-how.
Brownstones remain one of New York City's most resilient and rewarding real estate investments for investors who appreciate heritage homes, plan to hold for the long term, or want a mix of passive income and appreciating assets.
