By: Samantha Ankney

According to one recent study, the median selling price of a home in New York City in December 2023 was an incredible $780,000. Believe it or not, that was actually slightly down year-over-year.

That decline didn’t last for long, however. By January 2024, another study indicated that the median sold price had climbed to $835,000, or roughly $622 per square foot. Considering those kinds of gains and the city’s appeal, it’s easy to see why New York real estate is alluring to so many people.

Because of the appreciation in pricing, New York City is a great market for non-traditional investment strategies like wholesale real estate. This method makes it possible to get in on certain neighborhoods without the major upfront capital investment that is traditionally required. Here, you’ll act as an intermediary between a buyer and a seller. You find a property you like that matches your investment style. You get the seller to agree to one price and a potential buyer to agree to a higher one. The difference between those two prices is what you get to keep in profit. Historically, distressed properties are great wholesale real estate investment opportunities. Luckily for you, New York City has its fair share of these for you to pick from.

If you’re thinking about dipping your toe into the world of real estate investing in this area, there are a few key neighborhoods in New York that you’ll definitely want to be aware of moving forward.

Neighborhood Gems to Watch

Depending on your investment strategy, you may want to begin your search by looking at the established players – those classic areas with enduring appeal, name recognition, and major rental strength. Areas like the Upper East Side and Brooklyn Heights seem to be permanently on every investor’s list of possibilities, and even though they’re not exactly a “secret,” they still have significant appreciation potential.

On the flip side of things, you have the “rising stars” – those up-and-coming areas that may not have peaked quite yet, marking a major opportunity to get in on the ground floor of something big. Inwood and Long Island City would absolutely fall under this umbrella. The latter is conveniently located right in Queens, giving it easy access to Manhattan and many other boroughs in New York City.

Regardless, you’ll always want to pay attention to diverse options that are out there to really get the bang for your buck. Bay Ridge is a great investment opportunity if you’re trying to target families, for example. If you’re looking for something a bit more on the luxurious side, Tribeca is worthy of your attention.

Think about what types of investments you’d like to make, and the neighborhoods that meet those needs will more or less reveal themselves.

Why Tailoring the Investment Matters

Different investor personas will have different priorities, so it’s always important to understand where you fall so that you can tailor your investment to your long-term strategy. Areas like Brooklyn Point are attractive to high-net-worth individuals because of the many available luxury options. Young professionals, on the other hand, will likely want to check out Astoria, Chelsea, or even Murray Hill.

Throughout it all, there are several key metrics you’ll want to pay attention to. These include but are not limited to ones like:

• Rental yield. This can give you an idea of how much income an investment is capable of generating over the course of a year.
• Cap rate. This describes the return on investment, thus being a solid indication of potential risk.
• Appreciation rates. This can help you understand how much the value of an investment will increase over time.

These metrics will naturally differ across the neighborhoods you’re looking at, so make sure you understand each area within its own unique context to make a decision at the moment.

In the End: Capitalizing on Your Investment

Again, everyone’s investment goals are different, so especially when you’re talking about an area as robust as New York City, there is no “one size fits all” approach to what you’re doing. If you’re going for the “big risk, big reward” strategy, there are more than a few options for you to choose from. If you prefer to play things on the safer side, or if you’re just looking to generate a stable rental income stream for yourself, there is more than enough variety for that, too.

Ultimately, it’s important not to forget that one of the other factors that makes New York not unlike most other real estate markets is that it can fluctuate wildly. That is to say, you should consider the information in the guide outlined above as exactly what it is: a starting point.

Always make sure you do additional research to find out about up-and-coming areas or the status of old, established players at the moment. Remember that things in and around the New York City area change quickly. If you could go back in time and describe the current appeal of Brooklyn to someone even as recently as 20 years ago, they’d likely think you were insane. You never know what might be the next “up and coming” point of attraction. Likewise, make a list of your own goals and ensure you’re aware of your risk tolerance. Market reports, neighborhood guides, and similar resources will be invaluable in that regard.

Once you know your goals and how risk-averse you can be, you can return to the New York neighborhoods that make the most sense for your strategy. No matter what, there are many exciting opportunities in New York City’s real estate landscape. All you need is to know where to look.

Published by: Martin De Juan