should you buy real estate in new york city we'll demystify this topic in the
following video. I'm Nick at Hauseit. Visit our website hauseit.com to learn how to
save money if you are looking to buy sell or rent in new york city long
island the hudson valley as well as here in south florida so let's get started
so should you buy real estate in new york city
many people who are in the city are accustomed to renting and in some cases
people actually rent apartments for decades here in new york without even
thinking of buying but eventually your typical resident of new york starts to
realize you know hey is it a good idea for me to be basically throwing away my
money on rent every year and particularly in the post-COVID
environment where you have massive rent increases to recoup the rent declines
caused by COVID you know you have this uncertainty every year of your landlord
potentially raising your rent and having to have really awkward conversations and
negotiations which might not always work out in which case do you really want to
have to worry about moving over and over again so you know one of the main
benefits of buying real estate in new york city is the fact that it will give
you that long-term stability and certainty with respect to your personal
living situation other advantages of buying include of
course appreciation potential in terms of
pricing inflation protection given that real estate is a real asset and the fact
that you can potentially add value over time and enhance your equity position by
way of doing renovations and other sorts of updates to your property
so we already talked a little bit about the idea of buying as giving you sort of
long-term stability in terms of your personal situation you don't have to
worry about moving your stuff you don't have to fret about how whether if you
buy a new couch but if you have to move in six months are the movers going to
damage your couch you don't have to worry about stuff like that once you buy
a property and similarly you don't have to worry about that difficult
conversation with your landlord potentially having to raise your rent
brinksmanship in terms of that discussion you just don't have to worry
about it so that is one major benefit now let's go into more detail
about the idea of inflation protection if we take a step back and look at real
estate as a broad asset class even excluding and outside and beyond new
york city it's generally known to be a an asset that is a cyclical with
inflation in other words it does offer inflation protection and
the reason for it is quite simple you have the general concept of scarcity and
you have the concept of utility in the sense that real estate generates a yield
vis-a-vis of course the rental income that it produces so when you own a piece
of real estate regardless of what's happening with fiat currencies with the
reserve currency what's going on with the dollar nothing really matters
because at the end of the day somebody needs to live in a place in a home and
they're going to pay you whatever the prevalent market rate is in whatever
currency is the prevalent currency at the time for the privilege of having a
house so if you know you are looking to buy at
the end of the day it will protect you against you know large increases in rent
and inflationary pressures over the medium and long term buying real estate
also provides you with tremendous upside in terms of price appreciation and the
the main reason why it's very enticing is not necessarily because you're going
to get sort of a higher annualized return than you would get with stocks
that's a bit of a subjective topic and it's unclear
generally speaking you know whether stocks or real estate provide you know
higher appreciation but what is clear is the fact that when you buy real estate
you are able to very uniquely obtain ultra long-term financing i.e a 30-year
mortgage over the past few years we've seen interest rates anywhere you know
from the mid twos to currently around four percent for 30-year money and
30-year financing this is incredibly unique in terms of
financing in general when it comes to risk assets if you look to buy stocks
you know good luck leveraging your stock portfolio crypto portfolio because all
of that financing is marked to market meaning you're subject to price
fluctuations associated margin calls and at the end of the day the financing can
basically just unwind at any time so although the annualized return for real
estate might not necessarily be greater than what you would get if you
put your down payment money say in the stock market instead the fact that you
can leverage 80 90 percent in terms of a loan and secure long-term non-mark to
market low interest rate financing gives you the upside on that annualized rate
of increase for real estate over the entire spectrum of your purchase price
as opposed to just putting your contract deposit equivalent or down payment
equivalent in the stock market and you know just hanging out so
in general it is an amazing opportunity with respect to upside price
appreciation potential because of the fact that you can get very advantageous
financing as a buyer of a home the other benefit of real estate and
going ahead and buying something instead of renting is that you can ultimately
over time customize it to your parameters and you know if you make the
right investments the right types of renovations at the right time you can
really add value to your property and ultimately increase your equity position
in that property over the medium and long term
not to mention if you renovate your property it's going to be much more to
your liking it's going to be more comfortable and it's going to provide
you with a greater peace of mind and quality of life compared to
shifting between rentals none of which surely will check all of
your boxes in terms of what you expect and hope for in your personal residence
so we hope you found this video to be helpful and if you are looking to buy
here in new york city or anywhere in south florida we can help save you money
here at Hauseit so visit our website hauseit.com to learn more and if you have
any questions or comments please don't hesitate to leave a note below the video
or send an email to team@hauseit.com i'm Nick here at Hauseit we appreciate your
time today and we'll see you on the next video