BUYING REAL ESTATE IN NEW YORK: MAKE THE RIGHT CHOICE!

 BUYING REAL ESTATE IN NEW YORK: MAKE THE RIGHT CHOICE!

Buying real estate in New York is no small feat. By investing in this city, you're investing in one of the richest cities in the world. Indeed, the combined wealth of its residents makes New York City one of the richest cities in the world. But how do you invest in real estate in New York? Especially where to invest in this city where prices are already so high?

In this article we give you the essential keys to prepare your future profitable investment!

New York real estate purchase

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Costs and parameters to consider when investing in New York

When discussing real estate costs, taxes are an unavoidable topic. Before any investment, you should conduct a tax assessment, either on your own or with the help of a consultant (which we recommend).

New York, unfortunately for investors, is a particularly tough state and city when it comes to taxation. Various taxes and high levies are to be expected. For example, certain taxes apply when you buy a unit in New York for $1 million or more. This isn't uncommon in this very expensive real estate market. This tax increases gradually with the value of your property. Therefore, you must obviously plan for this Mansion Tax, which will be included in your calculations.

As an illustration, for a price of $1 million, the tax ($10,000) represents only one percent of the total cost.

Where to invest? Neighborhoods

Long Island City

With the number of new construction projects popping up in Long Island City, it's clear that developers believe this Queens neighborhood deserves attention and investment. This neighborhood is close to Manhattan and offers the same spectacular skyline views. Furthermore, based on projected cash flow from rents, net of taxes, maintenance, and insurance, Long Island City has great potential to improve your return on investment.

Williamsburg

The Williamsburg neighborhood in northern Brooklyn experienced a market decline a few years ago due to a proposed L train closure. However, after that project was canceled, demand for housing in Williamsburg increased significantly. In fact, the Williamsburg real estate market was much more stable during the pandemic than elsewhere in New York City, partly because fewer people left Brooklyn to escape the city than in more populated neighborhoods. Additionally, Williamsburg has a vibrant arts district and plenty of distressed residential properties to choose from, making it a neighborhood to watch in 2022.

Bushwick

This Brooklyn neighborhood has also fared well during the pandemic. Demand for multifamily properties, in particular, has steadily increased over the past few years. Many of these properties are in need of renovation, so you can find incredible deals on properties that other investors are refusing to touch. The great thing about investing in multifamily properties is that if you choose to rent the property until the seller's market improves, you can often make a decent return on your investment. Then, when the New York seller's market picks up, you can resell the property directly if you no longer wish to continue renting it.

Focus on Manhattan

The Manhattan, New York City, residential real estate market is recovering from Covid and is more than ever a seller's market. This is due to low mortgage rates, the growing demand that occurred starting in 2020, and the overall economic recovery. The majority of New Yorkers have been vaccinated. The Covid market bottomed out between May and July 2020. Since then, pending sales, referring to contracts awaiting closing, have increased weekly and have only recently stabilized. Records are being set each week for the number of contracts signed. Lack of supply is a problem. Sales volume in the third quarter of 2021 increased 242% compared to a year ago, and the third quarter saw the highest level of sales activity in 32 years!

The Manhattan market was weak from mid-2017 to 2019. This was despite a strong economy (in the US and New York) and record unemployment rates. In the first quarter of 2020, it appeared for the first time that we were beginning to recover, as evidenced by an increase in sales volume (prior to March 15, 2020).

Why are investors from all over the world investing in Manhattan real estate?

Even during the pandemic, international clients were able to negotiate the best terms. Recently, the increase in foreign demand has further accelerated. Manhattan and London are considered the world's top two cities for asset diversification and price stability. They are the only two Alpha++ cities in the world.

Important elements before an acquisition in NYC

The New York City rental market is hot as many New Yorkers who left the city during the pandemic are returning as their offices and schools reopen. This means landlords are raising rents. However, you'll still need to consider recent reforms to New York City's rent laws.

There are also beautiful multi-family homes that can make a practical first investment. One- and two-bedroom apartments are generally easier to rent, as tenants looking for smaller homes represent a large percentage of the potential population. Larger units command a higher price, but their vacancy period can be longer because there are fewer tenants for larger units. That said, the tenant mix for larger units can be less transient, as it includes the population with families looking to settle in for a longer period. Studio apartments also tend to be a good bet for a first investment because they are generally in high demand.