Real estate in New York can be an extremely lucrative investment. It also comes with its share of potential risks. If you choose to invest in this area, you will need to know the rules that apply. You will also need to be clear on what your goals are.
You can choose cash flow or appreciation
People who invest in real estate can choose between two main avenues of realizing a profit. These are cash flow and appreciation. If you prefer cash flow, you will need to invest in a rental property that brings in a high level of income. The profit that you realize should be higher than the amount that you spend on maintenance.
If you prefer to invest for appreciation, you will need patience to reach your goal. The value of your property will fluctuate but historically has generally risen over time.. This approach is riskier but generally more flexible.
You need to decide your risk tolerance
Your level of tolerance of risk is something you need to keep in mind when deciding whether to invest in real estate. In the recent pandemic, for example, many potential investors suddenly found themselves reevaluating their risk readiness.
The key to deciding on your total level of tolerance is to ask yourself whether or not you can afford losses during a market downturn.