What to Know About Buying Your First Investment Property in New York

What to Know About Buying Your First Investment Property in New York

It can be a very exciting time in a person’s life when they decide to make a property investment. Buying a property and making an investment are both momentous as separate occasions. These are both decisions that should not be made lightly, but with the utmost knowledge and consideration. When buying an investment property, it is crucial to be aware of the proper steps of the process and basics of investing. This ensures that you get the most out of your investment. 

How Do I Know I’m Ready to Buy an Investment Property?

When deciding to purchase an investment property, it is important for you to know that you are both financially and emotionally ready for the commitment. Running and caring for an investment property is a serious venture. It is because of this that there are different factors to consider before deciding if the time is right for you. This can include the cost of the mortgage, the operating costs, tenant issues, your ability to tolerate risk, and more. 

How Do I Know if a Property is a Good Investment?

Investments are made by people with the hope and intent of making a return on their money. This is why an important notion to consider when looking to purchase an investment property is if it has the potential to make money in the long run. Whether or not a property could make money can be determined by calculating the return on investment (ROI) of the property. This can be established through the net annual return of the property, including the rent that would be paid to you, minus taxes, repair, insurance, utilities, and property management costs. When the net annual return is determined, it can be divided by the amount that is spent on the property to determine the cost-benefit analysis.

What Should I Look for in an Investment Property?

When considering property investments, there are also many other things to consider before making a purchase. This can include the following: 

  • Is the house a fixer-upper? It can be beneficial for those with experience to expand their investment portfolio. For those without experience, it may not be the best purchase as it requires more work.  
  • What are the vacancy rates? Any lack of tenants can make it hard to have a return on investment. 
  • Are there demographic/psychographic shifts to be aware of? If any kind of campus is being built or pulling out of your market, it can cause either positive or negative impacts.
  • Will the market support my rent? The 1% rule states that a property should be rented each month for at least 1% of the property value.

Contact our Firm

Zimmet Law Group, P.C. is an experienced team of attorneys guiding clients through matters of estate planning and administration, divorce and family law, real estate, commercial litigation, business law, bankruptcy, and landlord-tenant law. If you require the services of an effective New York City attorney, contact our firm today to schedule a consultation.

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