Tips for First Time New York Real Estate Investors -Article Banner

If you’re planning to invest in New York for the first time, you’d better prepare yourself as much as possible. You’ll need to understand the market, trust your investment goals, and surround yourself with experts who can help you make smart decisions and avoid catastrophic mistakes. 

Even experienced investors can get tripped up in New York City. Here are some of the best tips we can provide to first time New York real estate investors. 

Know the New York City Market 

Things looked bleak for New York City early in the pandemic, but with people returning to work and school in a way that seems almost normal, the real estate market is back to its strong and competitive position. The economy is in excellent shape and the city continues to attract new residents all the time.

This makes our market one of the best places to buy an apartment or a building to earn rental income. You’re going to earn the most money when you buy an investment and then rent it out over a long period of time. It’s called a buy-and-hold strategy and likely to earn you more money now than flipping units.

With prices as high as they are and real estate as valuable as it is in New York, many investors do just fine with one or two units. But, you might want to think bigger as you begin your investment journey.

After all, you’d never put all of your money into one stock.

When you buy and rent out several units or an entire building, you’re less worried about vacancy risk. 

As you can see, investment goals are critical. So our first two tips to new investors are to learn the market and establish your own investment goals.

Establish Your New York City Real Estate Investment Goals 

Before you can start looking at dream properties and determining how you’ll gather your financing, you need to know what you’re doing and why. 

It seems pretty basic, but you need some investment goals. Think of these as a business plan.

Put together and prioritize the following:

  • Cash flow requirements
  • Expected appreciation for your property value
  • Scope of your investments; do you want to buy a single unit, a bunch of units, or an entire building? 
  • How long do you plan to invest and what’s your exit strategy?

These are some of the immediate questions you’ll have to ask before you invest. It will shape what you buy and in which New York City neighborhoods you decide to look. 

Financing a New York City Rental Investment

Financing is another early part of the equation and is an issue that should also be informed by your investment goals. Some of the questions you should ask before acquiring a rental property or finding the means to pay for it are:

  • How much do you have for a down payment? 
  • What will you do to finance the rest of the purchase? 
  • How much risk can you tolerate?
  • Do you have the available cash to spend on things like repairs, vacancy, and marketing?

Your Investment Property Isn’t Personal – It’s Business

Real estate can easily become emotional, especially for new investors and especially in a market like New York City. 

It’s important to detach from the property emotionally. In fact, do what you can to detach from the process if things become overwhelming and stressful. There are plenty of people who can help, and they’re not going to have the emotional connection that you do to an investment. Remember that this property is not a home to be occupied; it’s an investment with a single purpose: to earn money. This is a business. Treat it like one.

Every decision needs to be made based on data, facts, and the recommendations of local investment experts.  

Prepare for the Costs Involved in New York City Investments

Investing in rental real estate anywhere comes with certain costs. There are the fixed expenses that any investor will plan on – mortgage payments, property insurance, property taxes, etc. There are also variable costs like maintenance and vacancy. 

Work with a CPA or a good tax accountant who can explain exactly what you can expect to pay as a real estate investor in New York. You’ll also want to understand your tax benefits, because even though you’ll have to pay taxes on your rental income, there are many ways to reduce your tax exposure when you’re renting out property

Pricing Your New York City Rental Property 

You probably have an idea about what you’d like your property to earn every month, but the rental price is really market-driven. It doesn’t matter how much cash flow you’re after or what you’ll need to make your mortgage and tax payments. 

Maintaining and Upgrading Your Rental Investment

House RepairEvery rental property will need work, especially once you have tenants in place. Wear and tear is going to occur, and systems and appliances will need to be repaired and replaced. 

Prepare for this financially, and make sure that routine and emergency maintenance issues are a priority for you and your tenants. Any deferred maintenance or maintenance that’s left unreported by your tenants will damage the home and drag down its value. 

You’ll need to plan for upgrades, updates, and renovations as well. To continue attracting and retaining the best tenants in New York, you have to make sure you’re offering a property that’s modern, comfortable, and aesthetically pleasing. 

Unless you have the time, knowledge, and experience to manage an income-producing property on your own, hire a professional New York City property manager for your real estate investments. You need someone who knows the local market and understands the property management industry. Find a company that can accurately price the home, market it, and screen for highly qualified tenants. 

We’ve been doing this for years, and we can help you have a better experience as a new investor. Please contact us at Krieger Property Management. We’re a full-service property management company in New York City.