Investing In New York City Real Estate: Things To Know

When it comes to investing in the New York City real estate market,

there are some guidelines that you should follow.

New York has one of the most stable markets in the world due to the fact that it is under-leveraged and highly

transparent.

This doesn’t mean, however, that is a good investment for everyone.

The open real estate market means that everyone has access to the

same inventory, allowing an average Joe to compete with a top real

estate broker.

But you also need to be in great shape financially; New York City

properties are expensive, and you need more than just some money in

the bank.

Below are three things that you should consider before investing in

NYC real estate.

Condominiums and Co-ops

Out of all the residential properties in Manhattan, less than 23 percent

are privately held.

Out of those that are privately held, two-thirds of them are cooperative

units.

The rest are condos or townhouses.

Since there are more co-ops than condos, they are typically much

cheaper (on average, they are about 25% less).

However, there is a length approval process that goes along with co-ops, sometimes causing more headache

than is worth the money.

Co-ops require proof of net worth, along with a list of your liquid assets,

tax returns and brokerage statements.

On top of all of that, you’ll need to make a down payment of at least 20

percent.

Co-ops are also very difficult to rent out due to the board approval

process.

However, this processes ensure that your neighbors are

financially stable.

Condos, on the other hand, are very flexible.

They can be sold with relative ease, rented out to whoever you want -there’s a much lower barrier for

entry.

Jarrod Randolph, founder of JGR Property Group, recommends

investing in a new development due to the fact that they appreciate in

value disproportionately to the rest of the market.

However, only 10% of the marketplace has properties built

within the last five years; you need to act fast.

Neighborhood

It’s not as important to have your real estate in a prestigious location; rather, know what is within walking

distance.

Close proximity to a subway station is something that a lot of

renters look at as a make-or-break for any apartment; they’d rather have a smaller space than have to walk a half a mile to hop

on the train.

Also, look at the retail landscape in the area.

Having a grocery store close is something that has a pull on

tenants.

Know The Developer

When buying a condo, it’s important to know about who

developed the property.

A broker can help you greatly in this area; find out their track

record, see how their properties have performed in the past.

You want to make sure that you’re purchasing a quality

product.

Co-ops are a bit different.

You want to make sure that you know everything about the

board - both its previous decisions and where it stands on

future changes.

If they are looking to do a complete overhaul on the

building, that will significantly impact you financially.

It’s important to know not only what they’ve done in the past but where

they’re headed.