Borough in NYC is best for investing in residential Multi-Family?

Question

Hey Everyone!

Hopefully everyone is doing great. There was this one question that I have been thinking about asking. I have been interested @ investing in residential Multi-Family properties (2-4 units). The borough that I live in is in the Bronx, specifically soundview and I am thinking about investing in/around my area. But I want to know which is the best areas in the Bronx to invest in, and also the best borough to invest in right now. This may sound a little broad, but I am just confused right now.

Thanks in advance,

Omar

Omar Sanchez · Answer

Account Closed

Hey Derek Moore! Hope everything is going good! So according to what you said on this thread, you said that Brooklyn is not good for investing in those types of properties? Ive heard many times that Brooklyn is changing and being gentrified so fast, that it is becoming "the mini Manhattan". I don't know much about Astoria, but Ive been there, its nice.

I heard that The Bronx is a very hot makes to invest in these types of properties, but I am not sure if thats true. I live in SoundView, and I am interested in investing in/around my area, since there are a lot of Residential Multi-Family properties where I live. Do you know what are the average rents there? Also how do I specifically know the market that I am interested in? Do I just call up an agent? I know that I have to speak to other investors and network as well, but I REALLY want to know HOW to do it.

I have never been to Jamaica Queens to be honest, but since you said it is good area to invest in now, I think I should take a look.

Flushing as well? Ive been to Flushing before and let me tell you......... Its very crowded over there! Its very saturated with people and highly concentrated populated area.

Nassau County, I don't know about it.

How do I research the market? I know its a long response, but I am going  to learn as much as possible

Best

Jaysen Medhurst · Answer

@Virgilio Garcia and @Omar Sanchez my thinking on a cool down--and let me be clear I'm talking about property values rising more slowly, not a reversal--is based on a couple of factors. Manhattan real estate drives NYC/Metro-NY RE, and Manhattan real estate is driven by the luxury market. Over the last several years the top end of the market has been driven by low borrowing costs for builders and very low bond yields for investors. It's relatively cheap for developers to build and wealthy investors are looking for a safe place to stash cash.

As the Fed inches up interest rates, investors will have more options with better returns (bonds), which will lower demand for NY RE. Meanwhile, there are A LOT of luxury units about to come on the market (rental and condos). There are only so many uber wealthy people around the world willing to pay $3k+/sq ft.

Add on to that, the Justice Dept.'s new rules that any cash sales over $5mm must submit the names of that actual owners. This again, will lower the demand for luxury units.

Follow your supply curve: a glut at the top lowers prices allowing the not-quite-uber wealthy to move up a segment and everyone below follows suit. This ripples out across the city/area as few middle/upper-middle class folks are forced to look further outside the city.

My $0.02.

Isuf Aruci · Answer

@0mar Sanchez you have to really get a feel of the area, few examples could be is there a boom in contraction in your area, is transportation close by, is it a working class area, how fare from the city, talk to cops and ask about the neighborhood has it change or still going down hill. Me I perfer to invest in Pelham bay, Pelham parkway etc neighborhoods where I know in 5 years from now I'll have great appreciation and cash flow.

Jaysen Medhurst · Answer

Hey @Omar Sanchez, I live in Manhattan and I'm not looking at anything near by. It's just too expensive, with low cap rates. If you have a ton of cash and don't mind speculating on appreciation, you have a lot of options.

IMO: NY-metro is getting ready to cool down (a little), so I'd be cautious about jumping in unless I had a long time horizon. The lux market is on the edge of a glut and that will roll down through the market over the next 12-24 months.

Look at some other nearby markets. Personally, I'm looking at Danbury, CT and the Berkshires in MA. Won't see great appreciation, but cashflow is a lot better and prices are approachable.

Virgilio Garcia · Answer

@Omar Sanchez

Hey i have seen that rentometer.com click here

can tell you average rent prices in areas you are looking into.

Giovanni Soto · Answer

i don't think nassau is too good bc very very few multi's and high taxes.  Single fam's are only ok but take longer to sell and again the taxeeees.

Good luck

Virgilio Garcia · Answer

@Isuf Aruci

I can agree with your comment about getting to know the area and getting a feel for it. I just wanted to ask, how do you figure in 5 years, areas like Pelham will appreciate in 5 years? is this just normal cost of living going up? is their new construction going on ? i just want to get a idea of how you go about fining this information and maybe apply it to other areas like Woodlawn, Throgs neck or Edenwald.

These seem like moderate locations that are not to low like the Soundview, Hunts point are , or too high like the Riverdale,  Fieldston areas.

Virgilio Garcia · Answer

@Jaysen Medhurst

i see what you are saying, things brings up something i've been wondering for some time. i work in Queens by long island city and every where i turn, there is this high rise luxury rentals coming up. Their like weeds every where. i am actually taking a photo of one every other day outside my office window. its almost higher than my fifth floor view.

anyway, the rent on these units are really high.

I think its safe to say that no city employee is going to enjoy these luxury rentals because of the rent prices.

so,

it seems like the people who will inhabit the high rises, will come from some place else.

what happens if and/or when these people leave ?

also with the wealthy people moving in, that will drive up the property prices in Queens even higher, wouldn't it ?

i am no expert, i am on this site to learn and share opinions and hopefully gain as much knowledge as possible.

Virgilio Garcia · Answer

Hello @Omar Sanchez i am thinking the same. i was looking into queens as well, but according to asking prices, it seems like Queens is right be hind Manhattan. Brooklyn is on its way to Manhattan prices. Staten island, i have not searched any numbers. Bronx looks the lowest on price which brings me to @Jaysen Medhurst comment, about the area cooling down.

hi Jaysen, like Omar, i am looking to close on a multifamily property preferable here in the bronx. i wanted to ask how do you figure that things are getting ready to cool down? i would like to jump in when the market is lowest. also, would you say that the bronx area is better for cash flow or appreciation ?

Borough in NYC is best for investing in residential Multi-Family?

Most Popular Reply