4 Important Things to Know Before Investing in New York City Real Estate
By: Elegran Real Estate
Tags: Real Estate Investments, Elegran, Real Estate, Investing, Investing Tips

New York City offers a robust real estate market rivaled by few in the nation. Here, property appreciation continues its rise despite the global pandemic, with investors heeding the siren song of maximum rent potential.

Although investing in New York City real estate is a surefire way to increase your net worth, you can’t make your mark in this lucrative industry while wearing blindfolds.

To yield attractive ROIs over time and minimize risk, you have to make sure that the property’s location is profitable and that the property itself has been well-maintained before you purchase it.

Other considerations include property size, type, and price. In this article, we’ll go over each variable as you embark on your real estate investment journey, starting with location.

1) Location Is A Top Priority

A prime location in NYC is the difference between a successful investment property and one that yields mediocre ROIs.

When looking for investment properties in NYC, up-and-coming neighborhoods are just the ticket. With that in mind, consider the following locations:

Financial District — Wall Street, Battery Park City, World Trade Center areas

Brooklyn — Bay Ridge, Red Hook, Bedford Stuyvesant

Uptown Manhattan — Inwood, Washington Heights

Upper East Side — Yorkville, Carnegie Hill

Harlem — Central Harlem, Sugar Hill

2) Property Size Is Key

Two-bedroom apartments are a popular size for renters (especially “convertibles”), but some investors prefer to diversify their portfolios by purchasing studio apartments at lower prices.

That said, if you’re buying an investment property, you’ll want to get the most for your money. If you have a 3+ bedroom home, why not divide it into two separate units and rent them out separately? Just be sure to know the regulations for converting a single-family home into multiple dwellings.

3) Consider Property Type (Condos vs. Coops)

Condos are easier investments than coops, as coops have stricter requirements and less flexibility for leasing to renters.

Most coops prefer owner-occupied units because renters might not be as vested in the community as the owner would be. As a result, coop boards have covenants, conditions, and restrictions (CC&Rs) that govern how the apartment can be used.

For instance, some coop boards will allow only one sublet throughout the lifetime of ownership, for a maximum of two years. If you’d rather not deal with the hassle of coop ownership, be prepared to pay the price of freedom: Condos are typically more expensive than coops.

4) Your Investment Should Be Well-Priced For Resale

There’s no point in investing unless you plan to sell the property again (and for a profit!) So make sure you crunch some numbers and buy at a price that will allow you to sell within a reasonable timeframe (usually 5+ years after closing on the property.)

Now, there are other factors that we didn’t mention here, but we hope this intro list gives you some insight before making your final decision.

For other up-and-coming neighborhoods in NYC that you should invest in, check out our article, “5 Solid Locations To Buy An Investment Property In New York City,” or reach out to an Elegran advisor today!