Stability and high competition characterize the New York’s real estate industry. To successfully penetrate the market, it takes more than money in the bank. Discipline and consistency are key to survive in the city’s real estate business. In as much as it is top on investor options in the city, the industry’s growth is relatively slow compared to other industries in New York. Its conservative nature that results from specific families dominating the business discourages new entrants in the industry hence slow growth. However, the structure of business in New York is progressively transforming and opening up to younger minds Tevfik Arif Bayrock. Today, licensed real estate brokers in the city have equal and full access to listings and inventories as compared to markets in other countries. Apart from transparency in the industry, the real estate industry in New York is underleveraged. There lies a great opportunity for property investors who live away from the city.
The first dilemma for property buyers in the city is on condominium versus cooperative. Most of the city property is cooperative, they occupy more than two-thirds. As a result, cooperative costs are relatively low as compared to the condominiums. However, cost is not everything in property investment. Policies and processes of acquiring a cooperative are much more complicated than in condominiums. In the case of a cooperative, a buyer is required to produce proof of net worth, brokerage statements, tax returns, liquidity assets as well as make a 20% of the purchase price.
On the other hand, condominiums have high flexibility and less restriction. There are no barriers to entry. The owner is free to sell to anyone at any time at an agreed price without policy bindings. However, some consider cooperatives a more secure investment because the stringent rules protect property owners from less financially disciplined neighbors. While the restrictions and policies on cooperatives can be twisted to benefit the property owners, the difficulty in renting out cooperatives in comparison to condominiums cannot be overlooked.
Real estate investment in the New York City is also based on nature of a neighborhood. There are prestigious locations where demand for property is assumed to be high. Although prestige is a factor in the industry, proximity to social services, health facility, grocery store, dry cleaners, as well as subway proximity is critical when people rent a property. Just like in any industry, digging into the past of the property seller is necessary. Irrespective of whether it is a condominium or a cooperative, an understanding with the developer or cooperative board on plans is vital before buying property.
Investing in a new big city like New York also requires dedicating time to see and inspect the property before sealing a deal. It is important for a foreign investor to find time and see the apartment, check any downsides, and feel the neighborhood. Today, broker companies step in for investors to check the building and give a report. However, it is critical to identify a trusted company to assign the responsibility. Additionally, advancement in technology has eased the process in real estate industry. Prospective buyers and sellers can interact over social media and send pictures of floor plans. Skype is the most common platform.
Besides, young entrants in real estate are gradually revolutionizing the industry. Today, there exists an online platform that works like LinkedIn. The network enables engineers, landlords, designers, and architects to interact hence an efficient process of finding vendors. First, developers and landlords post their project details and vendor expertise, the system matches the requirements with vendor qualifications and suggests names to the developer. After the client identifies a suitable vendor, they are introduced and left to carry on to the bidding process. Honest Buildings is the online platform transforming the New York real estate industry.
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