Many investors are looking into real estate investments in the greater New York metro area, but only a few make it big. The question most asked is how to buy homes in NYC for less than you would pay in a down market. The fact is that NYC real estate is really no one thing. There are vastly different urban neighborhoods and ultra-modern, over-heated luxury places where rich and famous people like to live.
And then there are the affordable neighborhoods where ordinary people are trying to break into the real estate investment business. In New York, there is a pent up demand for new homes, and the supply exceeds the demand almost constantly. And in these ultra-modern, high-demand neighborhoods, there is a stark imbalance of new home sales and new home starts. And this is where first time investors really have to put in the legwork.
But if you have your mind set on New York real estate investing, what should you look for? You can start with your job. Those who work in New York City and have families, will naturally want to invest in rental properties.
Do your research. Look at the available rental homes in all five boroughs (Manhattan, Queens, Brooklyn, Staten Island and Manhattan East), and map out the neighborhoods that best match what you are looking for. Most real estate investment companies have websites that display photos of completed rental homes as well as information about the neighborhood and local amenities. You can also ask your real estate agent to put you in touch with families looking for their own homes in the specific neighborhoods you are researching.
Once you’ve narrowed your search, narrow it even more. Look at whether or not these homes have been fully inspected. A real estate investor in the family business can be very concerned about the condition of his investments. A home owner who rents should never rent to a tenant who hasn’t been through an inspection. This is a red flag!
When it comes time to purchase, don’t undersell yourself. It is a common real estate investor’s mistake to believe that he can buy a home for far less than its fair market value. Remember that while you may negotiate a lower purchase price with a seller you are dealing with, you must protect yourself from any negative news reports that may affect your negotiation power. As real estate investors we are in the entertainment business, and investing in these types of real estate properties may involve the risk of loss. By all means, have a professional inspector inspect the home, but as real estate investors we need to take into account the fact that we can lose some of our investment when things go bad.
Most Brooklyn Neighborhoods – When you look into buying real estate investments in Brooklyn, you’ll want to check out the neighborhoods that are on your list. If you live in Brooklyn, you know that there are some really great neighborhoods to consider in Brooklyn, including Bedford-Stuyvesant, Broklyn, Crown Heights, East New York and gentrifying neighborhoods like South Prospect and Green Lopez. These neighborhoods are some of the best in the city for affordable real estate investments. In addition to being some of the least expensive in the country, many of the home owners in these neighborhoods have maintained their homes for many years and do not have costly repairs to worry about. If you can find a real estate investment property in one of these neighborhoods, it will be a wise choice.
Other considerations – Besides location and tenants, there are many other factors that you should think about when thinking about investing in real estate properties in Brooklyn, New York. Is there a shortage of tenants in a particular area? Can an investor buy a building with little maintenance costs? Can the properties be rented out to tenants? Will you want to spend time and money on marketing and advertising?