Saving vs. Investing while living in NYC

[Angelica Rose]

I'm interesting in small-scale real estate investing to start with, after saving over the next 2-4 years. I'll be staying in NYC long-term, so my cost of living is higher. I make 50k, taking home way less after taxes. With good saving habits and cutting out my cab habit, I can save 6,000 per year. Not much, but it's what I can do. I've also convinced my parents to let me sell my car back in Baltimore, which could get me anywhere from 5,000 at the worst to the ideal of 10,000. Keep in mind I will also be going to grad school and taking out that loan sometime in the next few years as well. 

My question is how on earth do I do both (saving and investing) without completely depleting my savings after 2-4 years and starting from scratch all over again ? 

Also, note: 

I would love to make a small scale version of house hacking work, renting out rooms in purchased condo. But out of state investment, perhaps back in Baltimore, may make more sense in terms of entry cost. (And then I could hopefully use that money to buy something in NYC, as I do want to stay here long term and would like to own in one of the more affordable areas in the outer boroughs like Sheepshead Bay, Riverdale, Forest Hills, etc.) 

[Trevor Ewen]

@Angelica Rose

Getting a grip on personal finance is the first thing you need to do in NYC. This town is littered with opportunities to separate people from their wallets. Since cost of living is a huge factor here, I would always compare yourself against the averages. A lot of people now are spending 50%+ of their salaries on rent. Obviously, some families and people on a fixed income have no choice, but for anyone who can make the sacrifices, it's important to do.

Right now is a historically bad time for property purchases in NYC. We have cripplingly low rent/value ratios, we have plenty of new stock coming in (check out  Long Island City). We have a new tax bill that makes it less attractive to live in most of the NorthEast in addition to penalizing high-value mortgages. Eviction protection has also grown as a political issue. There are good and bad reasons for this, but none of them are encouraging for aspiring landlords.

NYC's day of reasonable values could come (I am interested to see what a flood of inventory does to competition). That being said, this is a place that almost operates outside of the normal rules of the domestic economy. I recommend going w/ my motto: "Make money in NYC so you can send it out of state to go make some more."

It's a great place to live, but your best asset is unlikely to be physical property in the near future. Focus on relationships and people who can help you invest in other areas that they know best. Baltimore could be your ace-in-the-hole, but it's not a place I know well enough to speak at length.