New York City, NY · Member since 2016 · 5 posts · 1 vote
Hey guys. I'm new to bigger pockets and to real estate. I currently rent a 2 bedroom in manhattan for me and my family but am looking to buy a place. Everything we like ends up being between 2.5 and 3M for a 2 bedroom apartment (gotta love Manhattan) and I'm wondering if it would be better to just continue renting and invest outside of the city. Currently we are paying $6500 +/month in rent and have about $300k saved up for investing purposes. I would really appreciate any input you all may have regarding strategy and how you would proceed. Thanks very much in advance!
Nick
@Taylor Brugna For years i worked in manhattan and lived in queens the commute argument my friends make to me just does not make sense. Live in manhattan pay 6k a month in rent so you can get to work in 15 mins or save 3k a month and commute 45 mins.
Ok so you sacrifice 45 mins each way but you have an extra 3k a month available to you to invest. One of my best friends makes 250k a year and pays 5k a month in rent to live in the financial district, I make less then half his yearly salary but guess who he calls when he needs to borrow money. Me.
PS I was born in NYC have lived here my entire life we actually have trees in queens lol quality of life in manhattan is over rated.
There is no right answer - it all comes down to preference and the path you want to choose (do you want partners etc). I know a lot of people that rent their primary residence and invest in properties. That would be my recommendation given your situation and location but certainly no right answer. Good luck!
Thanks Michael. Curious what strategies others would do in this situation. Look at the suburbs surrounding NYC (if so, where?) , nearby cities ? (I.e. Philly)
If you're looking to invest in near by states I'm in CT. Many opportunities here and not a far drive from NYC. I rent in NYC and I am looking to purchase property in CT to afford this insane rent
@Nick B. for the amount of money you are paying in rent you could buy a beautiful house in Queens and your mortgage would be 3k a month and you would have a much better quality of life then living in the city.
Eddie T. I'd disagree that a queens is a better quality of life if you work in Manhattan (with the exception of a few places). Just my two cents though. The commute negates the benefits if you work long hours. You need be very strategic if going this route!
Nick B. I'm going through something similar. I like the idea of taking the money it requires to own in NYC and invest elsewhere. If you leverage that 300k, the numbers could definitely work out in your favor. Sometimes renting isn't the worst idea-Good luck!
@Taylor Brugna For years i worked in manhattan and lived in queens the commute argument my friends make to me just does not make sense. Live in manhattan pay 6k a month in rent so you can get to work in 15 mins or save 3k a month and commute 45 mins.
Ok so you sacrifice 45 mins each way but you have an extra 3k a month available to you to invest. One of my best friends makes 250k a year and pays 5k a month in rent to live in the financial district, I make less then half his yearly salary but guess who he calls when he needs to borrow money. Me.
PS I was born in NYC have lived here my entire life we actually have trees in queens lol quality of life in manhattan is over rated.
But my main point to the original poster is that being a high income earner he could easily cut his expenses and set aside even more money monthly to invest.
In real estate with some work you can achieve 10-15% COC returns annually and an extra $36,000 a year set aside to invest and then compounded Nick would be in a much better situation in 10 years then that 36k a year going toward rent.
But I am from the school of sacrificing now so I can be wealthy later not everyone will agree.
Eddie T. I love this topic and you made some great points. There just isn't a right or wrong answer because there's just too many factors to consider. For what it's worth,I own in Ridgewood and I love it here.
On the other hand, (I'm going to make some assumptions of course) 1.5 hours of wasted time for who people who can afford that kind of rent is extremely valuable from both a financial and personal standpoint-especially when 99% of the people I know who earn enough to do that work significantly longer than 9-5. Think about a lawyer or doctor just because it's a common example . They could bill 30min of extra time a day and probably come out way ahead. A realtor could close one more sale, etc.There's always exceptions of course!
@Nick B. I rent in Astoria and have been looking to invest in Suffolk County, Long Island or in Northern New Jersey. I have been looking a lot on LI because I grew up in Suffolk, but the taxes are pretty pretty driving up the holding costs so I've been trying to find places with lower taxes. They are there but you really need to dig for
I've also talked with some investors who have invested in Philly and have done some light research on the areas, but have been trying to stick to areas around NYC since I want to be involved in the rehabs.
What strategies are you thinking, flips, buy and holds, wholesales, etc.? I've been mainly focusing on flips to get started.
I work in Chelsea, if you ever want to grab a cup of coffee to discuss, private message me.
I rent in Manhattan, invested in Chicago to help with crazy rent here. Crazy rent plus crazy rent increases every year are tough to swallow. So, hoping to buy another property in Chicago soon to increase cash flow. I considered several nearby locations like Yonkers and Jersey City. Very competitive markets if you target cash flow and especially if you are not doing this full time and want to get into a reasonable/lower crime/lower maintenance /better qualified tenants neighborhood. Even looked at REO/foreclosures for a while. People who do this for living can pay cash and do most of the work much cheaper, so they can even afford to pay more for a property initially. Midwest seems to be the way to go but you have to be willing to manage remotely, which is intimidating at first. That has been my experience so far.
Nick B. We work with several investors from NY who are looking to invest in areas of CT that make sense from a cash flow perspective. PM me sometime and we can set up a quick chat to see if we can help each other. I am confident we can help. I look forward to speaking with you soon Nick.
@Nick B. Hi Nick, came across this older post and am curious: what did you end up doing? I live and work in NYC as well and find myself in a similar situation. Look forward to the update!
This is a lifestyle choice. Do you want to spend a relatively high rent or purchase price and have a short commute and raise your family in Manhattan, or do you want to have a long commute and have a bigger house and yard and live in the suburbs, or something in between. At this income, price point, and stage in life, it doesn't seem like living more frugally to acquire cash flowing investments is a priority, but if it were, one can spend a lot (relatively) on rent or mortgage and still invest in RE. The dilemma Nick seems to be facing is that $300K liquid isn't quite enough to buy him the apartment that he wants. Welcome to Manhattan.
still renting in NYC. bought an investment property in upstate NY and just finished rehab. planning to do AIrBNB. still interested in multi-families, but seems to me its difficult to cash flow positive with a decent ROI on this coast.
What are your specs upstate and what kind of return?
This is not necessarily a cash flow area. It is an appreciation area. Cue those that will say you can't count on appreciation, or history repeating itself, etc, but I know and have seen way too many people make way too much money on appreciation alone. With that said, much of the market here seems frothy, but there still a strong appetite for multi-families. I don't see that dying down anytime soon. Take a look at YOY appreciation in parts of Queens, the Bronx, JC, etc and you might change your mind.
@Thomas N. yes MLSLI for eastern Queens and LI. Loopnet for commercial. There are effectively 5/6 MLS's that cover NYC but Streeteasy alone should give you pretty good coverage. Unfortunately, there's no secret site for multi-families with high cap rates/ROI =D
Brokers often come across decent listings that will never hit the market. As an example I'm licensed at 3 firms covering NYC, LI, and north NJ, with over 2000 agents total. I pretty regularly get emailed pocket/whisper listings and they happen to be the type that would probably be most attractive to investors. Those usually never hit the MLS.