Is Long Island City For Sellers or Investors?

You might be wondering at the strange title, "sellers or investors?" Kind of odd right? Yes, and that's because I want to bring attention to the growing trend and demographic of Long Island City. It's pretty important to know what type of demographic, from an investor's perspective, is of the property you're investing into, right? Or am I dreaming? It's a multi pronged idea, really, layered into 3 questions you can ask yourself:
  1. Should I sell and take profits from my property now? 
  2. Should I invest in long Island City now?
  3. Should I buy and flip or should I go long term?
Each of these questions can unravel into deeper layers like an onion. Let me unwrap your goals right now.

Should I Sell & Take Profits Now?

There's levels to this. Let's unpack this one layer at a time. If you're worried that property values will go down significantly in the coming days, weeks, or months, and want to protect your principal; then this should be what you ought to be focusing on. If you are having trouble sleeping at night because you're constantly looking at property values on Zillow or staring at the S&P Housing Index like a brain dead zombie, then you should think about selling. It's truly a tough pill to swallow because I'm of the impression that markets are always inefficient — that you can never truly time the markets. So on the off chance that you're right or wrong, you might feel sick to your stomach either way.

Another way to go about this is if you have a goal and you want to stick with it. This goal is to protect your short term principal from the downside to preserve capital while real estate is still highly liquid, or relatively so — to have that capital to finance other value deals within the allotted time of a 1031C.

Should I Invest in Long Island City Now?

Long Island City is the future. It's bordered by highly desirable Manhattan locations as well as the vibrancy of its neighbor Greenpoint and its surrounding neighorhoods of Brooklyn. It's the growing center of commerce with the lower price tag of its Manhattan counterpart. This is why all of the Manhattan Brokers & Realtors of acclaim are flocking to Long Island City, affectionately abbreviated as LIC.

The rule of thumb, either extravagantly or colloquially, is that Manhattan Real Estate will always appreciate over the long run. That was the proverb for what seems like a lifetime. However, what was once a hub of attraction from tourists all over the world pre-Covid-19, is now a gold mine in a desert. People are hurting in New York City right now, but for the contrarian investor, this might be the low hanging fruit for a long term investment. In a similar tone, Long Island City was peaking, although it was still very much more affordable than its Manhattan counterpart; now it is perhaps leveling off as inventory or demand goes down.

So should you invest in LIC right now? You should do your due diligence first!

Should I Buy & Flip or Go Long Term?

This is a philosophical question that you should ask yourself first. These are two of the main strategies in Real Estate, although there are many. To put it bluntly, short term buying and flipping is good in that you're not prone to market volatility as much as the long term investor. However, the drawback is that you might not be able to take advantage of huge price appreciations YoY assuming your equity compounds over the long term alongside rising trends in locales. So let's say you bought in a high rise Condo for $350,000 10 years ago and is now worth $1,000,000. That is an 85% Return On Investment. After inflation over 10 years, that $1,000,000 might have less of an ROI, but depending on the type of property it is; let's say it is a multifamily, you will also be receiving residual income from that over the life of ownership.

Ending Thoughts

Real Estate is a long game. It's not for the faint of heart. There are always going to be curve balls thrown at you in this industry. The key is to dial in to what you want, what your risk profile is, and to get after it! This is not financial advice by the way!
Is Long Island City For Sellers or Investors? Is Long Island City For Sellers or Investors? Reviewed by Alex Sung on July 09, 2020 Rating: 5

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