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New York City paints a rosy picture for real estate investors for many reasons. Apart from being a home of some of the most expensive neighborhoods, the city has redefined urban living. As more people flock to the Big Apple for finding good jobs and enjoying a better lifestyle, the demand for housing is on the rise in the city.
No matter if you have been living in NYC for years or residing on the other side of the ocean, NYC real estate has been attractive for every type of investor.
But as expected, NYC has tricky real estate due to the complex property transactions, lack of MLS, and complicated property types like co-ops. Be careful and avoid making the common rookie mistakes listed below.
Many new investors generally prefer the properties located in popular places like Central Park, Times Square, Wall Street, and Fifth Avenue.
However, New York is a local-oriented market as 70% of buyers are local and prefer to live in a primary residence. In other words, they look for properties away from noisy and congested areas like Times Square. Times Square can be an ideal location for people looking for a vacation home but it might not be a quite suitable rented location for locals who seek peaceful places like Battery Park to live in NYC.
Whether you are investing in Battery Park or Tribeca, make sure to have a clear real estate plan in place. It helps you avoid unplanned expenditures and financial troubles in the long run.
For example, many new real estate investors buy the home without knowing what to do with it—whether to flip it or turn it into a rental property? Besides, they don’t know how to pay off the loan amount due to the lack of a solid existing strategy.
Therefore, create a plan that includes the purchases and the purpose behind them, sales goals, budget, implementation, and follow-up. Creating a plan will give you a clear insight into your goals and the ways to accomplish them.
Many people think that real estate investment is a tried and test way to get rich overnight.
If you are one of them, you need to think again. Real estate investment can be rewarding if done with smart planning, hard work, skills, and strategies. Otherwise, expecting to make a huge ROI is nothing but daydreaming.
Many new real estate investors think that they can manage it on their own. Eventually, it is hectic for them since it’s not a “one-man show” to manage all things together, from buying property to fixing it.
Having the right team of professionals can make a difference. Therefore, you need to have a network of at least one real estate agent, handyman, appraiser, contractor, lender, and closing attorney. Make sure these experts are capable and professional enough to make your operations smooth with no issues.
A home buyer or renter in NYC is supposed to grab the property they come across. But that may be the case some 10 years ago.
Today, most buyers or renters are savvy and they research the property before moving in. They might ask you about the conditions of the property as well as the neighborhood. You can lose the deal if they find things unsatisfactory. Consider the key points like the vicinity of the area, flood zone, property rates, homeowner’s purpose of selling, and the neighborhood to make an informed decision.
Many real estate investors pay much for the properties than their original market rate. This happens as an investor goes through the frustrating and exhaustive process to find the right property. Overpaying directly affects his profit size while debt is the last thing to worry about. It might take a long time for the investor to recover from the expenditure and loan amount.
Even some successful real estate investors have made these mistakes at some point in their careers, but they learned from them. These lethal mistakes can be kept at bay with careful planning, research, and doing the right thing at the right time. This way, you can make your real estate venture a success in NYC.