Starting the RE journey in NYC...

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...feels like a truly bad idea !

Hi everyone,

I've been reading the blog and the forum for quite some time now and I think I'm starting to have a good understanding of the main elements to consider when purchasing a property and the math behind it. The issue arises when trying to apply theory in real life.

Every return calculation, Cash flow assessment etc.. is heavily impacted by one key parameter: Price to rent. Unfortunately, I live in NYC and as you all know, PR ratio doesn't play in my favor !

So my question is quite simple, how can one make profitable RE investments in cities like NYC where Price to rent ratios are above 30x ? I was reading an article the other day about the 2% rule.. If I'm not mistaking, the 2% rule is basically equivalent to a Price to rent of c. 4x.... so far from reality..

Same thing with Turner's book (very good by the way) which takes parameters in his examples that might be achievable in certain cities of the US but clearly not in NYC. I know there is a chapter about RE in expensive cities where he basically advises to invest somewhere else.

But I still want to understand, how do people make money in NYC with RE at current market levels? 

Thanks