It’s no secret that New York real estate is considered one of the safest investments there is, offering investors returns of up to 8-10%. This venture is almost as lucrative as gold bars under the mattress, and more and more people are trying to get in on the action every year. But how do investors – particularly rookies who may not be intimately familiar with the ins and outs of local real estate trends – find cheap apartments in NYC to add to their investment portfolio?
It’s important to understand the meaning of the word “cheap” in this instance – the traditional definition of the word doesn’t exactly apply to New York City real estate (median apartment prices in Manhattan top $1,000,000 – hardly chump change). So how do you find affordable investment apartments in The Big Apple? It’s all about that old adage – yes, you guessed it – location, location, location.
The Method to the Madness
A reliable way of maximizing your ROI is finding cheap NYC apartments in up-and-coming neighborhoods and getting in on the ground floor, or close to it, before other investors figure out about it. Recognizing the signs of a borough that’s about to go trendy can be a tricky business, but it can be done. Here’s how:
- Identify neighborhoods where trendy businesses are planning to open a location. A good example is an area with a Whole Foods. Businesses do a lot of research on potential hotspots because they want to make sure that their investment is going to pay off. You can benefit from this research and invest in the same neighborhood.
- Look into projects going on in the city – a perfect example of this concept is Hell’s Kitchen in Manhattan. Because of the development of Hudson Yards (an in-the-works neighborhood on the Hudson River, complete with school, businesses, and apartments) as well as the planned 2016 opening of the Second Avenue Subway, Hell’s Kitchen is a mecca of potential investment profit.
- Find cheap apartments in NYC by watching for ongoing renovations in the area. You might even want to take a trip to the city building permits department and pick the brains of the staff to see if they know the story on the neighborhood, as well as find out what the investment activity has been like locally.
- Capitalize on temporary drawbacks – projects like road construction and major public building reconstruction can deter buyers while the work is going on, driving prices down, but those things don’t last forever and that’s when you’ll see your profits climb.
- Keep a close eye on DOM (days on market). Data mine apartments similar to what you’re looking for and see if the DOM seems to be getting shorter. If so, now – not later – is the time to move.
It seems as though everyone these days wants to hitch a ride on the Gotham investment train, but if you start your search for cheap apartments in New York City by using these gem-identifying tips, you’ll be the one riding that train all the way to the bank.