I am a new investor and am beginning to look around the NYC area for my first investment property as well as a place to live. I have been told that multi-family houses are the way go, however given the costs in the area I am looking (Queens) it will run around $700k and drain all my liquid cash. I was initially leaning towards renting out 1 side and living in the other, however now I am beginning to think I should start small and invest and build up equity in a 2 BR Co-op or Condo and possibly acquire 2 of these in the near future instead?
Any thoughts or suggestions? I would love to hear others experiences. My ultimate goal is to own a few properties and rent them out in order to maintain a steady cash flow so that I can retire early.
Thanks in advance!
New York is one of the most expensive real estate markets in the country. You have many options to consider. You can invest in your own market or you can look outside it and find others where you can get more bang for your buck. Determine how much you think you will need for retirement in cash flow and see if your in a position to get that many homes in the next few years. If you can get that in NY then great, your closer to your investments. If not you might have to take advantage of some other markets.
Condos have something I do not like condo fees! And it is a hit to your cash flow. Nevertheless, each market works for different individuals. I suggest that instead of concentrating in the property you should concentrate in the deal. It seems that you have the capital so first get into a local Reia and network with people then find what is a good deal in your market and what makes sense for you. For instance, I wanted to first buy multi fam homes but too many people were beating me in obtaining them. Then I saw that single fam. Were not touched and found great deals. Find your deal buddy.
Investing in Co-Ops can be tricky. The Co-Op boards have a great deal of control over what you can and can't do with the unit including if it can be rented out or not. Co-Ops can also cause cash flow issues with their fees as @Carlos Valasquez mentioned about the Condos.
If you do go the Co-Op route just be sure you read all the by-laws and have a full understanding of how the board interactions and regulations work.
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