Buying a property for the sole purpose of renting it out is a whole other ball game. To make sure you’re completely in the know about everything that comes with being a landlord, we asked a few of our Triplemint agents for their top tips for first-time NYC investors.

In general, buying an investment property (as opposed to one that you’re actually going to live in) requires you to completely switch your thinking. You’ve got to analyze the apartments from the potential renter’s perspective and think about where your priorities would lie if you were looking for a place to rent.

For example, Triplemint agent JJ Choi says that easy access to public transport is almost always among the top three priorities for renters. Read on to find out what else is important when investing in property in New York City.

Does the Market Allow For Investing in Properties Right Now?

Building Front unsplash.comPC:

Triplemint agent Naline Sommer definitely thinks so. “The market has shifted from a seller’s to a buyer’s market,” she explains.

Triplemint’s Brad Lauren is also convinced that it’s a great idea to buy right now. However, it depends on how much profit you would like to make, he concedes. “Basically, if you have a good tenant who pays on time and isn’t too needy, this sort of stability turns out to be more profitable in the long run.”

Which Apartment Size is Best as an Investment Property?

Studio apartment pexels.comPC:

JJ Choi advises her investor clients to go for studios before other properties. “I would recommend a studio as an investment property as it generally provides a better cap rate. There is always a high demand for studios across all boroughs.”

Brad Lauren agrees, “You have to be able to rent what people can afford, so studios or one-bedroom apartments are always a good idea.”

Which Are the Best Areas For Investment Properties Right Now?

NYC area pexels.comPC:

JJ Choi has been living in New York since she was three years old and recommends neighborhoods in Upper Manhattan on the west side, like Manhattan Valley and Sugar Hill. “These are up-and-coming spots with condos for value,” she explains.

Furthermore, “Hudson Yards should be on your watch list as well,” she adds. “As for Brooklyn, the excitement is moving further east into Crown Heights, Bedford Stuyvesant, and Bushwhick.” Additionally, new developments are popping up in the Queens neighborhoods of Flushing, Sunnyside, and Woodside.

Triplemint Agent Brad Lauren has a bit of a different approach to finding the right location in New York, he recommends focusing on the neighborhoods that just had a new Starbucks open up. “It’s like Starbucks did the research for you and ran all the comps to determine an up-and-coming neighborhood. The initial investment will be lower and the profit will increase in the long run. Right now, I’m suggesting Inwood (Manhattan) and parts of the Bronx to my investor clients,” he explains. 

Does Being a Landlord Involve a Lot of Work?

Paying bills unsplash.comPC:

The size of the building determines how much work being a landlord is going to be. JJ Choi lists a few of the responsibilities: “Collecting rent, taking care of water and heat bills, making sure the trash is handled, ensuring the apartment is pest-free, and on snowy days making sure the heater is working and the sidewalks are cleared.”

For Brad Lauren, the amount of work involved is a matter of finding the right tenant. “Having someone rent your apartment who is stable, pays rent on time, and takes care of everything is invaluable. This will save you a lot of time and hassle in the long run.”

What Type of Buildings Should You Invest In?

Buildings NYC pexels.comPC:

Sure, new developments are super popular right now and higher rents result in higher profits, right? Not necessarily.

The high price of brand-new buildings might scare you away as an investor. Plus, Naline Sommer doesn’t think that new development is easier to maintain versus other apartments on the market. “In reality, some new developments end up having more issues as they were poorly constructed. You once again need a great agent to help navigate this landscape,” she advises.

If you’re up for the work, consider buying a place that needs a gut renovation and giving it a facelift yourself. This way, you’ll be able to ask for a higher price after the space has been renovated, suggests JJ Choi.

What Are the Risks of Buying an Investment Property?

Investment pexels.comPC:

Naline Sommer warns: “Be sure not to over-leverage yourself. There are times when your investment property will rent quickly and others when it will take a while based on supply and demand. You need to be in a position to cover the carry costs in the absence of rental income.” That means that you shouldn’t work with a tight budget that doesn’t allow for any unforeseen costs or renters who don’t pay on time.

Furthermore, don’t expect to make money with your property straight away. Naline states, “It’s very difficult to find investment properties that yield positive cash flow right off the bat. The NYC real estate investment market is more about overall return, with the majority of your return typically coming from appreciation in value over time.”