Want your NYC property to be a great investment? Upcoming neighborhoods and tips.

​Buying a property is a big financial decision and picking the right one is very important.

Whether you decide to live in the apartment or rent it out, it is your asset and at some point you may consider selling it.

​This article outlines the main points to consider when looking to maximize the appreciation of the property in the minimum time frame.

Consider holding the property

First thing to note – this is not about flipping houses. If you want to buy a property and see it gaining value, you should hold it for some time. This time period differs and depends on neighborhood, market cycle, and economy trends. Real Estate investment trusts suggest holding the property for 5-8 years before selling it.

Do the research

​There are two things that matter the most in your research: neighborhood and purchase price.
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Neighborhood

If you want the property to appreciate faster, you should pick the neighborhood that is getting changes and improvements. In other words, this neighborhood is emerging as a very desirable in 5-8 years.
Factors to look at:

• Investments in infrastructure

Transit options, new schools, renovated parks, gyms, new supermarkets and coffee shops, bars, and restaurants

• New constructions and conversions

Developers spend a lot of time on identifying investment opportunities making constrictions a trusted research source 
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• Days on the market (DOM)

Start comparing current DOM with a few years ago and check if it is declining. If the properties are selling faster, it means the area is gaining attention.

​Purchase price
As for the purchase price, there are a few things to consider:

• Completive Market Analysis (CMA)

This point can never be overlooked because it gives you the past, present, and future.

The right CMA will give you the list of active and sold properties with price per square foot, DOM, selling and asking prices.

​Note, that ‘recently sold’ category always tells you more than ‘currently active’ one.

• Property condition

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​If you are looking for a new development, check if the amenities and square footage justifying the purchase price. Compare with other new developments in the area and in the neighborhood areas.
If you are looking at the resale property, check for improvements that have to be made. Try to answer the question: how much would you need to invest in the apartment so in N years you will be very competitive as a seller.

• Tax abatement

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​Always sounds like a huge perk. However, consider a few facts. First, you can annually deduct up to $10,000 of property taxes. Second, when you decide to sell your property, tax abatement period can be over and your buyer will not be as excited as you were about this perk. Bottom line, try not to make your purchase decision solely because of tax abatement. 

• Investment evaluations (if applicable)

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​If you are buying an investment property, there are several ratios to calculate that include but not limited to ROI, CAP rate, and Cash on Cash return.

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NYC Neighborhoods to Watch in 2020

Data was calculated by Streeteasy as of December 2019. Data was identified using an index of four key performance indicators: annual change in median asking rent, annual change in median sale price, annual change in user searches that include a given neighborhood on StreetEasy, and the amount of new construction in the neighborhood. New construction is calculated as the number of residential buildings that received permanent certificates of occupancy from the New York Department of Buildings in 2019.