Investment Properties

Investment properties have always been popular in New York City, and there is even more interest in them now primarily due to global economic factors and very low interest rates.  Foreign investors in particular are taking advantage of currency fluctuations and the relative stability of New York real estate values as a hedge against uncertain conditions in their home countries.

Ok, so you're considering buying an investment property in New York, what should you be looking for?

The first thing to do is familiarize yourself with the various ownership options.  The three main choices are:

1. Owning a building outright
2. Owning a condominium apartment
3. Owning a cooperative apartment

There are also opportunities in commercial real estate, but that is a separate subject.  Of the three listed above, the least attractive and most constraining form of ownership is the cooperative, or "co-op".  In a co-op, you own shares of a corporation along with other owners, and your control over the property is limited; particularly regarding your right to rent out the property.

Condominiums and building ownership both give you much more latitude in what you do with the property and they're typically the best suited for investment purposes.

So what should you look for in a potential investment?

I recommend the following as a starting point:

• Location:  What is the neighborhood like now, and likely to be in the future?
• Appeal:  Will the property appeal to a wide variety or a unique niche of potential tenants?
• Rent:  What are the typical rents you can expect from a property?
• Income/Expenses: What are all the costs associated with ownership?
• Cap Rate:  What is the ratio of Net Operating Income to the price paid for a property?
• Appreciation:  What is the "upside" for the property over time?

Every investor is unique, and there is no substitute for market knowledge and good advice.  If you're considering investing in New York real estate, give me a call at (917) 647-1464.  Or shoot me an e-mail.  I look forward to hearing from you!

Reach me at: michael.sussilleaux@gmail.com