Buying Real Estate Rental Property – Best Investment Strategies

More and more people are choosing to buy rental property as a lucrative way of receiving passive income, with many opportunities for further investments, massive profits, and a life of luxury and opulence. There is much to consider and research before you make any investment in rental property, but you’re likely going to be quickly looking at cash flow and a realtor lifestyle you could only have dreamed of.

Is Buying a House to Rent a Good Investment? Advantages Disadvantages of Rental Property

There is not one clear answer to whether buying rental property is a good investment. It depends on many factors such as location, the behavior of the market, the tenants, unexpected costs, etc. Therefore it is impossible to say whether it is a good investment for you until you inform yourself as best as you can, and make an educated decision.

Advantages of Rental Property Investments – Tax Deductions, Financial Security

Being a landlord often sounds like a dream job. Essentially you’re being paid because people are living somewhere. It is the most famous and infamous source of passive income. This is perhaps its biggest advantage. In terms of how much work you have to put in per dollar earned, it can be extremely lucrative. Another advantage is that the real estate market tends to be quite stable, which means that the majority of properties (bought in good areas) increase in value. That means, while you’re making a passive income, one day the mortgage will be paid, and despite having made money off of your investment, you can sell it at a higher price than you bought it!

Rental Property Taxes – What Taxes do Landlords Pay?

For one, rental income is not subject to social security taxes. The social security tax rate is currently 12,4% split by employer and employee, meaning that when owning rental property you are paying 6,2% less taxes.

Disadvantages of Rental Property Investment – Difficult Tenants

The biggest downside is dealing with difficult tenants. These can be those that are harmful for the atmosphere (e.g. by being loud), those that damage property (high repair costs), and those that do not pay their rent on time. Another downside is also that you are legally bound quite heavily, as renters are strongly protected by the law. That means that difficulties can arise, and cause a lot of stress. Of course it’s important to decide in what real estate to invest, because if you buy a house, these issues tend to be less serious.

• Damaging Tenants
• Tenants who do not Pay Rent

What does a Landlord Do? Tasks, Responsibilities when Owning Rental Property

In short, a landlord is in charge of general upkeep. That means repairs in the house such as plumbing or electricity which the landlord has to fix. Other things include maintaining the more general facilites. For example, if you own rental property you have to make sure common areas are cleaned, the doors, elevator, etc. all work, and more. Then comes the problem of rent. Some tenants can be quite a hassle when they don’t pay rent on time, in which case you have to contact them and collect the rent yourself.

• Repairs in home
• Maintenance of Property
• Collecting Rent

Financial Planning for Becoming a Landlord

That means paying off all debts, making sure you have enough saved up for a downpayment, and securing your finances for the long-term future. It is also probably a good idea to secure a separate business account.

• Save enough for a Downpayment
• Job Security

Six Steps to Purchasing Rental Property – Buy House, Apartment

The five steps to owning rental property begins with your finances. Next, research and strategy. Where do you want to invest, how is the market in that area, what type of real estate you want to invest in, the general turn of the economy and much more! Now your strategy with short-term vs long-term rentals, buying a house or apartment, etc. Step 4 is finding the property you want to purchase. Step 5 means buying the property (and getting a good deal!). And lastly, perhaps most difficult, find tenants!

1. Order your Finances
2. Research
3. Strategy and Investment Planning
4. Find the Property
5. Purchase Property
6. Find Tenants

Step 1: Order your Finances – Landlord Bank Account, Savings

The most important thing before buying a house or buying an apartment is to get your finances in order. That means having paid off all debts, or nearly all, having a good credit score (otherwise get ready for mortgage insurance). Then, you will want to open a separate account. This can of course be done by registering a real estate LLC in which case you would buy the property over the company. Otherwise you will have to open a new account.

Step 2: Research – Where to Buy, When to Buy Rental Property

This is an important step, as you will need to get a lay of the land of where you want to invest and how. There is no universal manual because, e.g. if you buy a house in New York, it’s different than if you buy an apartment and then even more different if you buy an apartment in L.A. It’s also critical to know about the more specific location, there are always up-and-coming neighborhoods in every city. The top USA real estate neighborhoods are spread out all over, and you could be living near one without knowing! We’ve tracked down the best locations for the biggest players in American real estate:

• Top Neighborhoods: New York
• Top Neighborhoods: Los Angeles
• Top Neighborhoods: San Francisco
• Top Neighborhoods: Miami
• Top Neighborhoods: Las Vegas

Step 3: Strategy, Investment Planning – ROI, Value

The typical question for real estate and rental property investment is the ROI. ROI means return on investment, which is typically expressed in a percentage. It just tells you how much money you make in proportion to how much money you spend. You should know that, unlike stocks, or REITs, rental property will not be valuable or a good investment because it is constantly rising in value. Rather it is an additional income on the side, apart from your normal investments.

• ROI = Return on Investment
• Real estate is about cash flow

Step 4: Find the Property – House Hunting, Realtors

Next step is to find property, this can turn out to be quite difficult or quite easy depending on the region. Typically this is also the point where you will decide whether you choose a fixer-upper or a ready house. For experienced investors this is a normal thought, but if you are just starting out, a fixer-upper can be extremely risky and bankrupt you. Unless of course you want to get into flipping houses.

• Fix-Up or ready house?

Step 5: Purchase Property – Mortgage, Cash, Downpayment

Of course with a cash purchase you can circumvent a lot of the additional real estate purchase costs, but not all (think mortgage tax and transfer tax, and moving expenses). Still, as soon as you purchase with a mortgage you will be paying more in the form of mortgage interest. There are different opinions on the specifics, but it is always important that even if you are absolutely in love with a house, to let cooler heads prevail. There are many reasons to buy a house for rental property, but these are all related to finances and strategy.

• Real Estate Closing Costs
• Logic should decide whether you buy

To learn more about what happens when you get to the point of actually buying a house, you can take a look at our article on all the taxes you will pay when you buy a property or real estate.

Real Estate Purchase: All Taxes

Step 6: Find Tenants – Advertising, Location

This is the point that it can get very very frustrating, or very comfortable. If you’re living in a place like L.A., this can be quite easy with very high demand making a good tenant easy to find. In other places you may have to wait for the right one. Important though, if you get the feeling that the fit isn’t right, don’t sign a contract! It is near impossible to force a tenant out legally, and one more month without the extra income won’t make the difference.

• Don’t rush the search
• Easier in bigger cities, with higher demand

Top 5 Tips for Buying Rental Property! LLC, Saving Taxes

There are many things to be aware of, and things to take into account for buying rental property for real estate investment. It’s important that you research a lot so as to make a smart decision. Still, there are a few secret tips that are very important to ensure quick profit from rental property!

1. Do the Math!
2. Landlord Insurance
3. Found a Company
4. Buy or Finance?
5. Go out of State

Do the Math! Research, Calculation of Costs for Rentals

This is critical. Of course, before investing in rental property the most important thing is extensive and intensive research. This does not only consist of informing yourself about e.g. mortgage or mortgage interest, and a downpayment. The main question is: for each dollar that you invest in this real estate rental investment, how much will you get back. Factor in the time, and then compare to your finances. It is possible that your investment strategy only offers returns after two years. Can you hold out that long?

For each dollar you invest, how much will you gain? When is your investment profitable?

Get Landlord Insurance! Recover Lost Rental Income, Liability Protection

There are going to be accidents, unwanted injuries and more on your property. You need to protect yourself from this. One possibility is with a limited liability company or the similar s corporation (see below), but this is not going to protect you legally, rather than just make sure that a legal action does not bankrupt you. So you have to get landlord insurance! A landlord insurance covers lost rental income (great for the rare difficult tenant), damage to the property, and of course, as mentioned liability protection against injuries or worse on your property. Remember, itemizing insurance costs is one of the top methods of real estate tax deductions!

• Protection against lost rental income
• Damage to property
• Liability for injuries on property

Found a Company – LLC, S Corp or C Corp

As mentioned above, it’s important to protect yourself from possible liabilities. Even with landlord insurance, you should likely put in the effort and cost to found a real estate entity which owns the buildings in your place. The main examples are the LLC, S corporation, C corporation, and Limited Partnership. These all differ in the degree to which they protect you from liability, but also to the degree in which they prevent double taxation, a common problem with other real estate investment entities.

• LLC
• S Corp
• C Corp
• Limited Partnership

Buy or Finance? Mortgage or Cash for Rental Investments

You will hear many voices insuring you that the only smart choice for buying a rental property is to finance it, in other words to buy it using a mortgage. This is true in most cases, but if you have the money available, buying cash can be even better. No mortgage interest, no uncertainty, and you profit right away. Of course you’ll be a few thousand dollars lighter, bt this comes in with rental income over time. It’s also seemingly forgotten at times that a house purchased with a mortgage still requires a substantial downpayment, as well as significant additional costs buying real estate, which means even with a mortgage, where, e.g. a 20-year plan can hound you for years, you have some saving to do before starting to invest and reap profits.

• Buy with mortgage
• Consider alternative cash options

Go out-of-state! Rental Investments Far away – Is it Profitable?

Many first-time investors make the decision to buy close to home. They hear a great offer for a house nearby in an up-and-coming neighborhood and choose to buy because it’s just a few minutes drive away. It’s true of course that this has its advantages; if a renter has an issue or a repair, you can come by quickly and fix it, you can give personal house tours with no problems, etc. At the same time, it’s a calculation game. There are extremely profitable neighborhoods in many parts of the country. Buying a rental there can give you much larger profits in much shorter time. These profits would offer the possibility of a property manager, reduces your involvement and makes the now-larger income even more passive.

• Advantages to buying nearby
• Far away can be much more profitable

Gross Rental Income – Top Tip for Saving Taxes

Easily explained: rental income is taxed as your normal income would be taxed. That means you add it to your salary as you would a normal job. Rental income can include the following types of payments: Advance payments of rent, non-returned deposits, services provided in exchange of rental income. Now we know what the income consists of, but the question is how can you pay less of it?

What can be Deducted from Rental Income? Itemizing Tips

You can deduct more than you think from your rental income. That includes things like the mortgage interest of your property, the insurance costs and property taxes. Along with these it is also typically possible to deduct fees such as those for advertising your properties, and those for legal assistance and for the Homeowner’s Association.

• Depreciation
• Property Manager Payments
• Mortgage Interest
• Insurance Costs
• Property Taxes
• Advertisement Fees
• HOA / Condo Fees
• Legal and Professional Fees

There’s so many more tax deductions you can use when you own real estate, whether as residence or as a landlord!

Real Estate Tax Deductions

Best Gross Rental Income Deduction! Depreciation

The most important concept here is depreciation. Depreciation is the answer to every time you wondered why real estate moguls and landlords pay so few taxes. Large items bought for business purposes can be deducted from your taxes, but not all at once. That means e.g. a property worth $250.000 which is deducted from taxes over a 27,5 year period, leads to a reduction in your taxable income of

$250.000 / 27,5 y = $9.090

per year! Add that to all the other possible real estate tax deductions, and many owners pay no taxes on their rental income!

San Francisco: Real Estate Investment in Silicon Valley

San Francisco is one of USA’s legendary cities. It is immediately next to silicon valley, was the birthplace of hippies, and is one of the most important cultural hubs of the 20th century. This is reflected in the real estate market though. There are many reasons why San Francisco is considered to be one of the most difficult real estate markets to get into. Not to worry though, we give you the full rundown of where you should invest in this metropolis. First we take a short look at the economy and the general real estate market though.

Why is San Francisco Economically Successful – Major Industries, Prediction

San Francisco may have started its fame with the gold rush, but nowadays it is a tech mega-city. While a lot of the action takes place in Silicon Valley, there’s a massive number of tech startups starting out within the city limits as well. Another important sector is finance, with the largest porportion of employment in the city. Next are business services like consulting, retail, and of course tourism.

• New Technology
• Finance
• Business Services
• Retail
• Tourism

Where does San Francisco Rank in Cost of Living? Expensive Luxury with Culture

In the cost of living index published by Numbeo, San Francisco is ranked 4th (94,17), with New York being two spots ahead at an index score of 100,00. The average restaurant trip here will cost $19,00 and a loaf of bread $3,80. If you’re looking to move here, remember that basic utilities for a month cost $166 and the average internet plan $69. Not to worry though, as the average monthly salary is higher than elsewhere too, with $7.777 after tax landing in your pocket. If you want to see where San Francisco ranks, look at a few select cities below, with their index and rank in US cities:

• Hamilton, BE (147,00) – 1
• New York City, NY (100,00) – 2
• San Francisco, CA (94,17) – 4
• Los Angeles, CA (81,31) – 15
• Miami, FL (77,98) – 25

Rent Index – Does San Francisco have the Highest Rent?

It is also possible to look at the rent index. This gives information about the relative price of rent. Considering that San Francisco is considered by many to be the most expensive city to rent in, it’s no surprise, that they rank first in the most expensive city for renting. This also demonstrates the unique position which San Francisco has, where its cost of living generally is not higher than other cities, but its rental price is. Take a look at the ranking below:

• San Francisco, CA (116,48) – 1
• New York City, NY (100,00) – 2
• Hamilton, BE (94,98) – 3
• Los Angeles, CA (75,17) – 10
• Miami, FL (62,01) – 16

San Francisco Views – Drone Flight

San Francisco is obviously most well-known for the Golden Gate Bridge. It has so much more beauty though, and this is captured by drone in the video below.

Real Estate Investment: High San Francisco Real Estate Inventory

Real estate in San Francisco is legendary. Not always in a positive way, but legendary nonetheless. From impossibly luxurious apartments, to the infamous rowhouses on its hills, and impossibly high rent, this real estate market has it all.

Real Estate Prices San Francisco – Overview

If you’re looking at investing in real estate, you can expect to pay an average of $14.485 per square meter in the city centre. Outside the city centre it’s less, but still a strong $9.989. Comparing that to a rental price of $3.224 for a 1-bedroom apartment, or $7.100 for a 3-bedroom.

• $14.485 per Square Meter
• $3.224 for 1-Bedroom Apartment

San Francisco Real Estate Market Guide – Is it a Good Time to Buy in the Bay Area?

In January of this year, the amount of sales were 67% higher than in the year previous. A remarkable increase. This is likely not going to continue increasing as heavily, but it is indicative of the positive change in the Bay Area. What’s important is that the San Francisco real estate market is incredibly complex, with prices varying quickly, and by location. At the moment the market is marked by very high inventory, and low sales. That means it is a good time to buy in San Francisco at the moment, especially single-family residentials!

• Yes, right now is a good time to buy, with low prices thanks to many houses being on the market

Most Expensive, Cheapest Neighbourhoods in San Francisco – Real Estate Prices

The most expensive real estate in San Francisco can be found generally in the North of the city. These are places like Presidio heights, Cow Holow, and Russian Hill. Central San Francisco is home to a broad range, with e.g. Ashbury Heights being among the most expensive, while Monterey Heights ranks lower. The cheapest can be found in Southeast San Francisco (Visitacion Valley, Bayview, or Silver Terrace).

The Top 5 Most Expensive Neighborhoods in San Francisco – Real Estate

If you’re buying a house, the most expensive place to do it is in Presidio Heights, with a median sales price of $7.350.000. Next up is Pacific Heights with a median sales price of $5.600.00, and Sea Cliff at $4.672.500. The full ranking of the top 5, by median sales price is below:

1. Presidio Height – $7.350.000
2. Pacific Heights – $5.600.00
3. Sea Cliff – $4.672.500
4. Cow Hollow – $4.296.000
5. Russian Hill – $3.850.000

Top 5 Cheapest Neighborhoods in San Francisco – Real Estate

If you’re looking for something a bit more affordable, but still in vicinty to the city, you’re still going to be forking out the cash. The cheapest area in San Francisco is Hunter’s Point, where you will still be paying around $825.000 for a house. Next up are Visitacion Valley ($910.000), Bayview ($920.000), and Oceanview ($935.000). The full list, from cheapest to more expensive below:

1. Hunter’s Point – $825.000
2. Visitacion Valley – $910.000
3. Bayview – $920.000
4. Oceanview – $935.000
5. Bayview Heights – $937.000

San Francisco Taxes – Property Taxes, Real Estate

San Francisco taxes are a complicated matter. It of course depends on if you’re in San Francisco County or San Mateo, and many more issues. Let us take a deep dive into San Francisco taxes, and what you can expect to pay.

San Francisco Tax Rates – How much Taxes do you Pay in San Francisco

In general the state of California has income tax rates between 1% and 12,5%. Also, for large businesses, the city of San Francisco has an additional tax for expenses of large businesses. This is a 1,5% gross receipts tax on payroll expenses. Additionally, in San Francisco there is a total sales tax of a massive 8,5%.

• Income Sales Tax: 1%-12,5%
• Sales Tax: 8,5%

San Francisco Property Tax Rates – California Rankings

California property taxes aren’t simple. In California, the average rate of property tax is 0,77%. Each county has their own regulations and expenses, therefore it is important to also look at the amount you will pay in San Francisco County. Here, the average property tax is 0,65%, compared to Los Angeles at 0,75% or the neighboring San Mateo County at 0,66%.

• Avg. US Property Tax – 1.1%
• Avg. California Property Tax – 0,77%
• San Mateo County – 0,66%
• San Francisco County – 0.65%

Interested in property taxes in California? Our full article on the matter should be interesting to you:

• California Property Taxes

SoMa to Ashbury: Top San Francisco Neighborhoods

There are too many neighborhoods to remember. Here we present the most important, hottest, and up-and-coming neighborhoods to keep in mind. Our top San Francisco neighborhoods for real estate are:

1. SoMa
2. Union Square
3. Sunset District
4. Nob Hill
5. Haigh/Ashbury
6. Pacific Heights

SoMa – Downtown Hub

This downtown San Francisco neighborhood is massive. If you’re looking for real estate, it’s a great catch though, South of Market (or SoMa for short) is still affordable. This is also in part due to the upcoming Central SoMa project which will create thousands of housing units and jobs.

Union Square – Lively, Exclusive City-life

Union Square is the pulse of the city, surely being among the liveliest and most exclusive parts of the city. Don’t forget luxurious shopping opportunities and swaths of hotels, restaurants and art galeries. It may be home to many tourists, but also to some of the best streets in the city

Sunset District – Suburban Dream

Sunset district is a massive neighborhood, in terms of space as well as population. It is the suburbia which many young American families are looking for. There are many schools and universities, it is safe, and with an unemplyment rate under 3%, it is also a financially healthy area. Not to forget are also the many parks, which make taking a stroll here a pleasure.

Nob Hill – Elegance and Style

While Russian Hill is still bustling with tourists due to nearby Ghirardelli Square, Aquatic Park and Lombard Street, Nob Hill is the elegant, exclusive side of San Francisco. This is the SoHo of San Francisco. Four of the best hotels reside here (Big 4), Grace Cathedral (a replica of Notre Dame, Paris) and beautiful parks, such as Huntington Park with the wonderful fountain of the tortoises.

Haight/Ashbury – Still in?

Haight Ashbury is still one of the hottest parts of the city. The former birthplace of the flower power movement, where legends such as Janis Joplin and Jimi Hendrix lived, is still the center of the alternative and creative scene in the USA. Here you can find many cafes and restaurants frequented equally by students, neo hippies, families and tourists. Although many expensive boutiques and high-end vintage stores have settled here, the flair as a former hippie stronghold is still palpable.

Pacific Heights – Best Quality of Life in San Francisco

When it comes to the quality of life, you can’t do better than Pacific Heights. This neighborhood is always described as the most expensive and exclusive part of the city, and for good reason. All around, there are unbelievable views of the coast. It is even home to what is called Gold Coast, one of the most expensive areas in the US inhabited by San Franciscos billionaires. For a more affordable area than gold coast, consider Western Addition which shares the luxurious atmosphere, without the sky-high prices.

Buying New York Real Estate – Guide and How-To

If you want to buy real estate in New York, you’ll have to get informed. There’s many details and intricacies to be aware of and things to pay attention to. We will answer all your questions: What is the property tax like? Is New York property tax higher than elsewhere? Which New York neighborhoods are best? When should I invest in New York real estate? We answer all questions in this guide for buying real estate. Before we go on about the city though, let us take you through an important question. Which type of real estate do you want to buy?

If you already know in more detail what you’re looking for, go ahead and skip to one of the main articles! (opens in a new tab)

• Buy Apartment – New York
• Buy House – New York

Buying a House – Full Explanation, Guide

If you want to buy a house, our article on the topic is where to look. Our full guide takes you through all steps of the process from beginning to end, starting even before you decide to buy a house, and finishing after you close the deal. If you want to invest in a owning a home, this guide on buying a house is everything you need:

Buying a House

Buying an Apartment – Full Explanation, Guide

If you’d rather buy an apartment, we have you covered. Buying an apartment can be a long and arduous process, especially in a mega-metropolis like New York City. Many people neglect even the thought that apartments can be bought as opposed to rented. This article should convince you otherwise. There is sufficient reason to believe that a significant proportion of people who are currently renting their apartment, could easily buy that same property. Our guide, taking you from A to Z, will no doubt teach everything you need from this top guide. If you are even thinking about buying an apartment, this guide will bring you a step closer to your dream. This is your one stop for everything you need to know:

Buying an Apartment

Buying Real Estate in New York – Unique Costs

To buy real estate in New York is of course different than elsewhere. Let us explain the details which New York real estate carries with it, and what makes it different from other cities’ real estate markets. New York is a thriving metropolis of millions of people and a GDP larger than that of most countries. The real estate market, like most other markets in the city is booming, and there’s good reason to invest now. The only other market that would be similarly difficult is if you want to buy real estate in L.A., but honestly, there’s enough celebrities in the Big Apple.

• GDP: $1,57 trillion
• Pop.: 8,4 mil.

Taxes – Property Taxes, Real Estate Taxes + More

New York property taxes are very different than the general US property tax system. The state of New York changes the tax rates from year to year, depending on the needs of the state. Additionally, it is also complicated by the fact that tax rates are constructed in millage rates as opposed to tax rates. Property tax calculation is therefore more complicated than you’d like, but let us try to explain.

What are Millage Rates? New York Property Taxes Explanation

Mill Rates are Tax Rates. Quite similar to conventional property tax rates, Millage rates serve the same purpose and work quite similarly to the normal percentage of property value calculation. A millage rate, is first and foremost a number, as opposed to a percentage. This number indicates the amount of property tax a property owner is required to pay for their property. A mill rate of 1 indicates 1$ of tax for $1.000 worth of property, a mill rate of 24 indicates $24 of tax per $1.000 worth of property.

• Mill Rate of indicates amount of dollars of tax per thousands of dollars worth of property

New York Property Tax Rates – Most Expensive?

It is often said that New York has incredibly high property tax rates. This is true to a certain degree, New York state, and especially the counties surrounding the city of New York have relatively high property tax rates. NY has an average property tax rate of 0.86%, and this is higher than e.g. California (0.77%). Still Florida, the other major real estate state, has a significantly higher average property tax rate of 0,94%.

• New York Property Tax: 0,86%
• California Property Tax: 0,77%
• Florida Property Tax: 0,94%

Property Tax in New York Boroughs – Manhattan, Brooklyn, Queens, etc.

New York city is the real estate hotspot par excellence. Still its property tax rates are quite low compared to others in the area. New York city is made up of 5 counties (the same make up the 5 boroughs of New York), and they each have property tax rates lower than the national average.

• County of New York (Manhattan) – 0.65%
• Queens – 0.87%
• Kings County (Brooklyn) – 0.90%
• Richmond (Staten Island) – 0.91%
• Bronx – 0.97%

Want to learn more about New York Property Taxes? Reducing your property taxes? Everything you need to know in our guide on

• New York Property Taxes

Buying Real Estate Taxes – Transfer Tax, Mortgage Tax, More

You are required to pay 3 taxes when buying real estate. In New York, it is actually four. there is the real estate transfer tax, which in New York at the moment is a rate of $2 per $500 of property, amounting to 0,45% of the purchase price of a home. Additionally, you will pay the mortgage tax, called the mortgage recording tax in New York, which has a rate of 1,80% when your mortgage is worth less than $500.000 and when the mortgage is worth more than this, the rate is 1,93%. Then there is also the mansion tax, an additional 1% when the property is worth more than $1 mil. Lastly, you are typically required to pay property tax pro-rata when buying real estate.

• Transfer Tax: 0,45%
• Mortgage Recording tax: 1,80%-1,93%
• Mansion Tax: 1%
• Pro-Rata Property Tax: 0.65%-0.97%

Additional Costs – Real Estate Over-Budget

When hearing about the price of your new home, whether an apartment, condo, townhouse, or villa, you never think about all the possible additional costs in real estate. While some call these closing costs, this is not strictly true since, in addition to closing costs like real estate transfer taxes, title-search fees, escrow fees, realtor fees, etc., there are additional costs like mving and furnishing or renovation. L.A.’s closing costs are a little over 2% of the mortgage. I.e. of the mortgage principal (the money loaned to you) you can expect to pay an extra 2% to cover closing costs.

• Additional 2% of mortgage

For more information on additional costs that you can expect when buying a home:

• Buying Real Estate – Additional Costs

New York Real Estate Market Outlook

It’s almost a cliche that New York real estate is impossible to find, and that housing is a commodity for the few and rich. This is true to some degree, the real estate market in New York is intense to say the least. Yet there is enough reason to be optimistic that one can find a property, and once that is done, all evidence seems to indicate that this property will only gain in value over time.

Are Real Estate Prices Going down in NYC? – Housing Market Trends

No. The housing prices are increasing steadily, as indicated by the Case-Shiller Index. To accurately guage the development of real estate prices, the Case-Shiller statistic published by Standard & Poor’s indicates how prices are changing. To be exact, it is a residential real estate market value trend. This index allows one to view the development of housing prices in the city. In New York, one can easily see that housing prices are increasing steadily for the past 9 years.

• Housing Prices increasing steadily for past 9 years
• Case-Shiller Index NY shows development of housing prices

How much it Costs to Buy Real Estate in New York – Average Real Estate Prices

As mentioned, NYC is expensive. You will be paying more per square foot in this city than most others in the US. As mentioned though, because these prices are increasing, this investment is one which is worth the money. So how much does real estate actually cost? In New York City, the median property costs $697.000, averaging to a price per square foot of $307. If you’re looking for a passive investment and want to rent out your property, you can exxpect a Cash on Cash return of 2,1%, with rental income being around $2.200 per month.

• Median Property Cost: $697.000
• Price per Square Foot: $307

New York Real Estate Trends: Price Development Overview

Manhattan, Brooklyn and Queens are clearly a sellers market, as agreed on by the vast majority of real estate experts. The amount of sales in real estate increased by over 20% in the past year. This demonstrates the increasing power of this real estate market. Meanwhile, to get a look at what you’ll be gaining once you have bought a property, median sales price also increased. From $275.000 to $335.000, an increase of 22%! Now, you may be thinking that homes are totally overvalued then, but this seems not to be the case, with the average real estate selling 2.6% below the price asked by the seller.

• Amount of Sales: +20%
• Median Sales Price: +22%

New York Real Estate Agents – How to find the Best Real Estate Broker

Apart from experience, there are a few important things which can make or break the quality of a real estate agent. First and foremost, you will want to find someone who will act in your best interest. This can be done with an agent who is cutthroat and willing to do what it takes in negotiating with a seller, but generally, an important attribute is that your agent is compassionate and friendly. Otherwise, it can quickly turn into a nightmare experience. You of course also want to get along on a personal level with your agent, otherwise the many conversations can become quite arduous.

Finding the Perfect Real Estate Agent – Tips

These are the three things you should keep in mind when looking for a real estate agent. If he or she is missing any of these, you quickly run the risk of a financially risky situation, or simply an uncomfortable experience. This is the 3 p’s rule. The 3 p’s are

1. Personal attributes: is the agent trustworthy, approachable, diligent, etc.?
2. Payment: What is the payment structure of the agent? is their goal to make you happy or to close on as many properties as possible?
3. Past: Take a look at the agent’s past deals to see whether they have been successful

List: Top NYC Real Estate Agents

These are, according to our research the top real estate agents in New York. They are among the best and top selling agents, but also among those with the most favourable experience reports. Remember! Everyone has their own needs, and thus need different agents, but these have shown to have quality, care for their clients, and make good deals.

1. Richard Leasure (Howard Hanna Rochester)
2. John Farrell (EXIT Realty Homeward Bound)
3. Alexa Lambert (Compass)
4. Michael Kenduck (21st Century)
5. Bryan Karp (RE/Max)
6. John Lajara (RE/Max In the City)
7. Geraldine Andolina (21st Century)
8. Daniel Axtmann (Berkshire Hathaway)

Saving Money on Real Estate in New York – Tax Deduction Tricks, Tips, etc.

Real Estaet and real estate taxes are a domain where saving money is just around the corner. With the right moves, you can save in the thousands of dollars. You may want to leave this up to a tax attorney or your agent, but it’s best to be informed yourself about the options.

New York Real Estate Tax Deductions – Save Money on Mortgage

In New York City, you can deduct your mortgage interest from the first $750.000 you owe from your tax bill. This is a massive help to those struggling to make payments, especially considering that those paying mortgage interest will likely be in a harder financial situation as is. Another option for saving on taxes is to upgrade your home, which to make it more energy efficient. Lastly, if you want to improve the state of your house by taking out a home equity loan to pay for renovations, you can deduct the interest from this loan from your tax bill as well.

• Mortgage interest can be deducted
• Home equity loan can be deducted
• Energy-efficiency upgrades

We have a full-size guide on how to use tax breaks and deductions to your advantage:

Real Estate Tax Deductions

First-Time Homebuyer Advantages

For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.

• Less taxes for first-time homeowners

Step-By-Step Guide – Buying Real Estate Process

These are the steps you will take when buying real estate in New York. They are by no means the most detailed (for details see buying apartment New York, and buying house New York), but cover the broad overview of what you should be keeping in mind when thinking about buying real estate. The process for all real estate will be similar, with differences only existing in the details.

1. Save up for the Downpayment
2. Find a Mortgage Broker
3. Get Mortgage Preapproval
4. Get your Team Together: Attorney, Real Estate Agent, etc.
5. Start looking at Listings
6. Go to Viewings
7. Submit an Offer
8. Close

Buying L.A. Real Estate – Guide and How-To

We take you through the whole process of real estate investment in L.A. From the very first step, deciding on the type of real estate, to the final step, how to sign the closing contract. Buying real estate in L.A. surely is a task unto its own. There are many ins and outs, and small details which you cannot risk overlooking. What is the property tax like? Is California property tax higher than elsewhere? Which areas are best? Is it a good time to invest in L.A. real estate? We answer all your questions and more in this XXL guide for buying real estate. Before we go on about the city though, let us take you through an important question. Which type of real estate do you want to buy?

If you already know in more detail what you’re looking for, go ahead and skip to one of the main articles! (opens in a new tab)

• Buy Apartment – L.A.
• Buy House – L.A.

Buying a House – Full Explanation, Guide

In this article we go through how to buy different types of real estate in Los Angeles. It covers most of the most important information, but if you’re looking to buy a house specifically, we have the perfect guide for you. In our article Buying a House, we go through every step of the process of buying a house specifically. You won’t have to look anywhere else for info:

Buying a House

Buying an Apartment – Full Explanation, Guide

Apartments are quite different from houses, not only in their shape, but also in their demands, and in the steps you will have to take to buy one. We cover everything you need to when buying a house, from the taxes, deal negotiation and more, specifically for buying a house. This is your one-stop guide for everything you need to know

Buying an Apartment

Hidden Costs when Buying Real Estate in L.A.

There are a few costs which people don’t consider when buying a piece of real estate. These are not universal, as you may buy a furnished house which would take away moving costs, or you may buy without a mortgage, which would prevent mortgage insurance. There are also taxes which you should be aware of.

Additional Costs of Buying a House, Apartment, Condo, etc.

There are many additional costs in real estate. These are sometimes also called closing costs, as they are associated with the close of the deal. Yet closing costs aren’t all additional costs. As mentioned, furnishing and moving are also often forgotten costs of buying real estate. What you pay for in closing costs are things like moving expenses, real estate transfer taxes, title-search fees, escrow fees, realtor fees, etc. In Los Angeles, closing costs are a little over 2% of the mortgage. I.e. of the mortgage principal (the money loaned to you) you can expect to pay an extra 2% to cover closing costs.

• Additional 2% of mortgage

For more information on additional costs that you can expect when buying a home:

• Buying Real Estate – Additional Costs

Taxes when Buying Real Estate in L.A.

Thankfully you will not have to pay mortgage registration tax when buying real estate in L.A. You will likely have to pay the real estate transfer tax, called Documentary Transfer Tax in California. This is a tax you pay to the state in order to finance the documentation of your real estate in the administration. You will also have to pay pro-rata property taxes. Usually the owner of a piece of real estate will pay the property taxes for a whole year, if you buy a property in June, you will need to pay the seller back the remaining 6 months of property tax.

• Documentary Transfer Tax
• Property Taxes

There are 3 Taxes when Buying Real Estate!

Real Estate Market L.A. – Explained

The L.A. real estate market is a wild west. To understand and work in this system is complex and demanding, even for real estate experts. We’ve done our research and can give you the full run down of how real estate, buying apartments, buying houses, and investing works in the city of angels.

Home Price Trends L.A. – Housing Market Development

Home price trends for the area are reported using the Case-Shiller Index, a statistic published by Standard & Poor’s forming part of an index of residential real estate market values. This index allows one to view the development of housing prices in the city.

• Case-Shiller Index shows development of house prices

How much it Costs to Buy a House in L.A. – Most Expensive Parts of L.A.

In Los Angeles County, which includes the less-in-demand outer regions, single-family homes are at $660.000. In other counties in the region, these prices are comparable, although the famous Orange County takes the cake with a median home price of $930.000. Where in L.A. are the most expensive houses? Where is it cheapest to buy a house in L.A.? Below the list of median sales price for all of L.A.’s counties, ranked.

• San Bernardino County: $370.000
• Riverside County: $490.000
• Los Angeles County: $660.000
• Ventura County: $750.000
• Orange County: $930.000

Home Price Trends in L.A.: Where Los Angeles Houses are Gaining Value

The most important question when looking into buying real estate is how the home prices are changing. You do not want to buy real estate in a region where prices are decreasing. That would mean that when you sell your property you will make losses. According to the data, Riverside County, just east of L.A., and including Joshua Tree National park, is gaining in value second most. Where in L.A. are home prices increasing the most? San Bernardino county, with a year-over-year increase of 20% is gaining the most in value. In Los Angeles County, home to most of L.A.’s best neighborhoods, includes the less-in-demand outer regions, single-family homes are also gaining in prices.It is experiencing the most modest increase with 12%. Below the year-to-year change of single-family residences of Los Angeles.

• San Bernardino County: +20%
• Riverside County: +15%
• Orange County: +13%
• Ventura County: +12%
• Los Angeles: +12%

Joshua tree national park is considered one of the most beautiful national parks in the whole USA.

Average Rent Prices L.A. – Trend, Prediction

The median price of an apartment at the moment is $667.000. On top of this, rental prices have been steady in the past years, when looking at average rent. A price increase of about $100-$200 is very acceptable, and you can see a very similar development over the past years. These are the prices per square meter that you can expect to pay in rent ($/m²).

• 2017 – $2.281
• 2018 – $2.385
• 2019 – $2.516
• 2020 – $2.524

Where is the Highest Rent in L.A.? Most Expensive, Cheapest Areas

So where is the rent highest and where is it lowest? That’s an important question, even when you are looking to buy. For real estate investors, some areas, with very high rent can be attractive as an investment opportunity, as it is likely that the purchase price will quickly be balanced out by the high rent. The highest rent in L.A. can be found in North of Montana, with $4.690. Meanwhile, the lowest is in Jefferson Park ($1.355), where the beautiful houses and architecture allow this formerly high-class area to be attractive to people of all walks of life.

• North of Montana ($4.690) – Highest rent
• Jefferson Park ($1.355) – Lowest Rent

How to Calculate House-Buying Budget? L.A.

Assuming you have job security as well as a salary to pay for mortgage payments, you can make quite an easy calculation to decide on your budget. It’s based on the simple addition of your downpayment plus additional costs.

How much is a Downpayment in L.A.?

More on mortgage further below, but typically you want to pay at least 20% on your downpayment in L.A. as well. Although there are fairly low mortgage interest rates at the moment, and FHA loans make low downpayments possible, these are unnecessary costs, and you should only invest in real estate if you really have enough savings. On the average house of $600.000, you will pay a downpayment of $120.000.

Calculation for Buying a House – Budget

Now you know your downpayment (20%). Now you should add the additional costs which come with buying a home. These are typically around 2-5% of the mortgage, but in L.A. comparatively low at around 2-2.5%. That means you can calculate your budget by taking the money which you have on hand to spend, and multiplying this by 4.85!

Savings x 4.85 = Budget!

In What Type of Real Estate Should I Invest?

This is the first and most decisive question you will have to ask yourself. Don’t worry if you don’t know the answer! That’s what we’re here for. We’ll also let you in on a little secret, it’s actually not bad at all to not be certain of the type of real estate you want to buy. You may just have a little extra cash, be fed up with your current living situation and just looking out there. Well I’d recommend that you take a look at what you could afford.

Best House Hunting Tip! Don’t Narrow your Search

There is a great two-step process for making a decision on what you want to buy: first you calculate your budget, second go hunting on real estate portals for houses, apartments, condos, etc. With this you can start searching before being nailed down on what type of real estate to buy. Too many people assume that they will need to buy a house because of particular reasons, and end up narrowing their search. You may be able to afford a house in an area only slightly outside of your main search radius, or an apartment which is large enough for your dogs, etc.

What Types of Real Estate in L.A.?

Los Angeles has different types of real estate than e.g. New York. Whereas New York is all apartments and townhouses, L.A. has much more opportunity for single houses, condos or duplexes, and of course also the infamous vacant lots, where you can build your dream home. These are popular because they allow for a fairly private space, and prevent the stress which comes with door-to-door neighbors. Other types of property are townhomes, small lot homes (advantage: no homeowners’ association!), coops, much like the New York apartment market, TICs (Tenancy in Common), and of course the infamous vacant lots, where you just buy a piece of empty land.

• Single-Family Home
• Duplex
• Condo
• Townhome
• Small-lot Home
• TICs
• Vacant Lots

Is it Hard to Buy a Duplex in L.A.?

Yes! Duplexes (or even triplexes) are typically hard to own for the resident, as investors tend to buy these and rent them. These are some of the most popular investment properties in all of Los Angeles, and if you want to move into your home, this will be a hard buy! Go for a condo, apartment or house instead!

Preparing to Buy Real Estate in L.A. – 5 Steps to Prepare

To buy real estate there are 5 easy things to do which will prepare you perfectly for the purchase of real estate. These are largely financial, as you could guess. Not to worry though, it is not complicated, only requiring you to get some things in order. Before buying real estate, you need to do these 5 things:

• Look at your finances – outstanding debts, savings, etc.
• Gather documents about finances
• Speak to a mortgage broker
• Decide on your financing – which type?
• Find a real estate agent, an attorney, and finally a home inspector

Buying Real Estate Steps – Guide & Explanation for L.A.

Now the most important stuff. The process of buying real estate can be long and arduous, or if you know what you’re doing, a fun and engaging project. Either way, you will have to invest time and thoughts into your search.

Before you Begin – Preparation for Real Estate

Before doing any searching or getting in touch with a realtor, you should check your finances and get a mortgage pre-approval. Especially in L.A.’s market, this is vital. This means an in-depth credit report and an intensive search for a good mortgage lender. More on good mortgage lenders and how to find them in our article Mortgage Explained.

Mortgage pre-approval shows sellers and mortgage lenders that you are a serious buyer, and that you are good for the money you owe. Not only that, but it makes the search much easier because you have, on paper, exactly how much you can spend.

A mortgage broker is the first person you want to have in your team for buying a house. When finding a mortgage broker, shop around and see what brokers are best suited for your case.

• Get a mortgage broker!
• Shop around

Beginning the Search – First Steps

Assuming you have a real estate agent (which you should), this process is mostly delegated to them, although you can help by doing some of the work yourself. Your real estate agent can then get in touch with these property owners and pave the way for the process. Another good option: Ask around with family and friends. It’s much better to deal with people you are friendly with than strangers.

• Look at Listings Yourself
• Drive through a Neighbourhood you like
• Ask Friends and Family

Check Your Credit! How to Check your Credit Score

To prepare for your mortgage and preapproval, you will have to check your credit score. This is really not as difficult as it sounds. Your credit score will make or break your real estate purchase. The first thing you have to do is get a credit report. This is free. You can choose from one of three agencies in Equifax, Experian, and TransUnion. After you get this report, you should check if everything is in order. There are occasional errors, and other methods by which to improve the way this report looks. After, you order your credit score. You can choose to either pay a credit reporting agency (e.g. Equifax), or check for free in your online banking or on your credit card statement.

1. Order credit report
2. Check for errors in report
3. Check credit score from your bank (free) or from a credit reporting agency (costly)

L.A. Mortgage – Most Important Facts, Tips you have to Know

When buying any property, you will need to pay a downpayment on your mortgage. In L.A., with comparatively high real estate prices, your downpayment should be at least 20% in order to avoid the likely very high mortgage interest rates. While we dscussed above how you should be looking at a mortgage broker, these are the things you have to know about paying your mortgage.

Average L.A. Downpayment Price – High Mortgage Rates, High Interest Rates

Mortgage in L.A. means for many people, a downpayment that is not only a financial burden, but often also a burden too heavy to stem. That means many people who need to buy a house, will either struggle to save up, or make large sacrifices to pay such a downpayment, or, potentially worse, make a smaller downpayment. This smaller downpayment leads to high mortgage interest rates, and of course principal mortgage insurance. With a home price of e.g. $700.000, the classic 20% downpayment is a hefty $140.000! How much is a downpayment in Los Angeles? The average person pays over $100.000 when buying a home in L.A., just on their mortgage.

• L.A. Average Downpayment: >$100.000

L.A. Real Estate Agents – How to find the Best Real Estate Broker

What to look for in L.A. real estate agents: Real estate agents will often show off with their amount of experience. That’s of course important, but a young agent can be much more knowledgeable, and a person who has worked in the field can also be incompetent. Next, also make sure that you personally get along well with your agent. That means meet yor agent, and see what you think and what kind of an impression they make.

How to find the Perfect Real Estate Agent – Easy Rule

There is a tried and tested method by which to identify the perfefct real estaet agent for you. You can use the 3 p’s rule. The 3 p’s are

1. Personal attributes of the agent – is he/she trustworthy, approachable, diligent, etc.?
2. Payment structure – How is he/she being paid? is their goal to make you happy or to close on as many properties as possible?
3. Past track record – You can often quite easily find out the agent’ss history, and whether they have been successful in the past

List: Best L.A. Real Estate Agents

These are, according to our research the best real estate agents in L.A. Remember! Everyone has their own needs, and thus need different agents, but these have shown to have quality, care for their clients, and make good deals.

1. Suarez Team
2. Park Regency Realty
3. Stephanie Younger
4. Pinnacle Estate Properties
5. Jon Grauman
6. Billy Wynn
7. David Yun/Eighty8
8. Rafael Gevorkian

Before you Buy – What type of House Ownership?

There are many ways to own a home, these usually depend on whether you are a sole owner, or whether your spouse is also owning part of it. Finally, the differences are mostly in who will own the property when ways part. Apart from the classic sole ownership, you have joint tenancy with right of survivorship (2 or more people own a home, equally), tenancy by the entirety (identical to joint tenancy but when owners are married). Lastly, there is tenancy in common, where 2 or more people own a certain poportion of a home.

• Sole Ownership
• Joint Tenancy with Right of Survivorship
• Tenancy by the Entirety
• Tenancy in Common

Finding a House, Apartment, etc. in L.A. – Best Method

If you want o buy a piece of real estate in L.A., you have to go ahead methodically. Of course you’ll likely have an agent helping you with everythign along the way, but you will want to get involved in the search as well. Firstly, how to find good properties, and next, what you should be paying attention to.

Beginning the Search – First Steps

Of course your real estate agent will be looking at listings constantly for you. They often send weekly reports of possible properties, of which you can then decide which you like. Additionally though, it’s also good if you take a look yourself at listings on different websites. Some real estate listings are also not online. That means it can be a good idea to drive around neighborhoods which you’d like and look for open houses or for sale signs. Your real estate agent can then get in touch with these homeowners and pave the way for the process. Another good option: Ask around with family and friends. It’s much better to deal with people you are friendly with than strangers.

• Look at Listings Yourself
• Drive through the Neighbourhood
• Ask Friends and Family

What to Look for in a House – Tips!

The main things you have to look out for in your house are likely first and foremost financial in nature. Is it in your price range? Does it need many repairs? Etc. There’s other things you may personally find important like, proximity to city, public transportation access, a swimming pool, and more. Your realtor can tailor your needs and desires so that you receive listings which align with your wishes. Another important thing, if your financial situation is not as liquid, you can look out for homes which are in need of renovation. These are often sold undervalue, meaning that you can buy and renovate them for a lower price than a similar house in perfect condition.

Things you may need to look for are the following:

• Price
• Size
• State of proeprty (e.g. possible renovations)
• Schools and Leisure Opportunities in the area
• Number of baths and Befrooms
• Local real estate market (rising or decreasing value)
• Access to Public Transportation
• Distance to Shopping and Supermarkets
• Amenities like Swimming Pool or Balconies

How Long it Takes to Buy a House in L.A.

From start to end, the process is going to take a few weeks at least. The time can range anywhere from three weeks to three years, but on average you can expect about 6 months from start to finish. Some people search for years and fail to find anything. In the end, how long you spend finding a new house depends on how well-prepared you are. If you are financially responsible, have a lot of money saved, the process can be shortened, as your pre-approval will be easier to obtain, and you are able to financially outbid and provide security to sellers. In any case you should not rush it, as that leads to mistakes and misjudgements that can cost you in the long run

• 3 Weeks to 6 Years

How to Buy Real Estate – Closing the Deal

So you’ve found your dream property. It’s everything you ever hoped for, and you can afford it. What now? Now is the critical step where you are going to have to make an offer that’s not too much and not too little. The best scenario is that you make an offer slightly lower than what the seller is willing to accept, they make a new offer, and this offer is the lowest they will go. Then you will have paid the least possible for your property.

Step 1 – Making an Offer

Your agent will help you htourgh this whole process. Beginnning with telling you what your first offer should be. You will also want to have the agent present the offer to the seller, taking over from you. You may want to do this in person, but if you have the right agent, it will always be the better option to have them take care of this, as it will certainly not be the first dealing they are brokering.

• Agent makes the First Step

Also! Remember that you may not be the only one trying to buy this piece of real estate. That means that you may end up in a bidding war with other buyers, especially for desirable, and affordable homes. Things that make you a stronger candidate are better finances, mortgage pre-approval, as well as being lenient in the closing date.

How to Prepare a Purchase Agreement – Important!

What’s a purchase agreement? It’s basically you saying what you imagine under your purchase. the seller will then agree to these (hopefully), and the rest of the deal will depend on this. For this reason there are many details in this agreement. This includes personal information of you, the buyer, as well as the owner, i.e. the seller. The location of the home, the price which you want to purchase it for, who is lending the mortgage, and the amount of the downpayment. Decorations, or other features which will be left in the house, and the circumstances on which your purchase decides. This is very important. A purchase agreement must ensure that your purchase depends on the home inspection, the mortgage approval, and the appraisal. Lastly, it will also include the closing date

• Price of House
• Mortgage Lender
• Personal Infos
• Anything Left in House
• Contingencies of Purchase
• Official Closing Date

Home Appraisal + Inspection – What to do After Closing

Closing on your home is not the last step of the process. You will have to get your home inspected, appraised, and your mortgage approved. These are critical steps, and while not all are mandatory, skip them at your peril. Don’t get lazy now! Skipping steps here will leave you regretting it for years! This is what you absolutely have to do after closing on your real estate:

1. Home Inspection
2. Home Appraisal
3. Mortgage Approval

Avoid Issues and Traps in Real Estate – Home Inspection!

Not only should you do this, but it is also your legal right to get a home inspection. It is more of a precaution than a convenience. This can prevent you from unseen future payments that can haunt you for years. A professional home inspector will go through the house, taking a look at everything from electrical systems to heating. This professional inspector gives you a summary of the house. It includes all possible issues. There are always some issues, and the may not be very significant, but can be, and even if they are not, can be used as leverage in your negotiations.

• Not necessary, but good

Should I get a Home Inspection? When to get Home Inspected

There are almost no circumstances under which you should avoid a home inspection. It may seem like an avoidable cost at first, but in the end you will be thankful that you did get it done. Especially in L.A., where roofing issues, and other things like sinking are much more common than elsewhere, a home inspection will be a blessing, and will most likely save you thousands of dollars.

What’s the Value of My House? Home Appraisal done Right

A home appraisal is where an expert comes to take a look at the property and takes a detailed look at everything in order to properly estimate the true value of the piece of real estate. This is an important step, and will likely be obligaotry. It is influential when looking at reselling, but also for your mortgage. Importantly, you should take note of the detailed report, as the appraiser may have gotten something wrong, and you can contest the appraisal given there is a mistake.

• Contest the appraisal if necessary!

Why is a Home Appraisal Important?

Your lender will most likely require the official appraisal of an expert. That is why there will often be no way around it. But also, because it is good practice to have this done. For lenders, the motivation of the home appraisal is to avoid giving you a loan for a house that is worth less than you buy it for, because it is less likely that you will be able to pay back the loan. Therefore you likely want your appraisal to be the same as your purchase price. If the appraisal is lower than the price, you may not get approval, if it is higher, count yourself lucky, but this may become a factor in renegotiations.

• Avoid a low Appraisal Price!

Saving Money on Real Estate in L.A. – Tax Deduction Tricks, Tips, etc.

Real estate, like taxes is a domain where experts always seeem to pay considerably less than everyone else. That’s because they know all the ins and outs. There are countless ways to save money, but many of them consist of complicated processes like founding a corporation or a charity, or going into business with other people. Still, there are simpler methods which you can start using today, with little energy expended. These are our top tips for saving money on real estate in L.A.

L.A. Real Estate Tax Deductions – How to Save Money on Taxes

For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.

• Less taxes for first-time homeowners

In addition to these incentives and deductions, there are also programs such as veterans’ loans, or less costly mortgage programs for low- and middle-income buyers from Home Possible Mortgages. In Los Angeles specifically you can make use of ‘California’s First Mortgage Program’ and ‘First Home Mortgage Program’ given you are eligible. These provide finanical assistance and make the process much less financially risky.

We have a full-size guide on how to use tax breaks and deductions to your advantage:

Real Estate Tax Deductions

Saving with Home Improvements

The planet is dying, and everyone has to do their part. That’s why many houses in L.A. nowadays are sold with eco-friendly upgrades already done. These inlcude renewable energy sources such as solar power, or other variants such as more insulated roofing or smart thermostats. Having these can cut down on your recurring costs.

• Eco-friendly = Wallet-friendly

Final Checklist – Steps to Buying Real Estate in L.A. Explained Shortly

These are the steps you will take when buying real estate in L.A. Behind each of these steps there are more details and things you should take a look at. Remember that in total, the process of buying real estate, when doing it right, is not a short 2 week affair. That’s a good thing though, do not hurry the purchase! That’s where errors and mistakes come up most frequently. Finally, these are our top tips and tricks, our steps to buying real estate in Los Angeles.

1. Save up for the Downpayment
2. Find a Mortgage Broker
3. Get Mortgage Preapproval
4. Get your Team Together: Attorney, Real Estate Agent, etc.
5. Start looking at Listings
6. Go to Viewings
7. Submit an Offer
8. Close

This city article is part of our full size guide: Buying a House

New York Real Estate – How to Buy a House in NYC

Perhaps the most famous city in the world, New York has everything going for it. An incessant economy, endless museums and creative opportunities, neighbourhoods for every taste, and an undoubtable atmosphere. Buying real estate in New York is, for that reason, so popular and lucrative. The real estate market, as we will see below, is an opportune chance to invest safely with high profits. So, with relatively low interest rates, the lowest property tax rates in New York State, and seemingly impossibly low prices, now is the time to invest in New York real estate!

• Rather buy an apartment in New York?

Largest House in USA – New York Mega-Mansion

One of the most expensive houses in the whole of the USA, 281 Daniels Lane is a bigger house than you could imagine. Built by multi-billionaire Ira Rennert, this massive compound has multiple houses and sits on 63 acres of waterfront property. If you want to get an impression of how luxxurious and opulent this self-made entrepreneur lives, you should know that his neighbours commonly complain about the noise of the oversize helicopter which lands on the designated helicopter pad on the property.

The massive mansion boasts multiple dining rooms, a gym, two tennis courts, three swimming pools, a bowling alley, a movie theater, a private museum showcasing the billionaire’s massive art collection, and a basketball court.

• Location: 281 Daniel’s Lane, 11962 New York

What is New York’s Biggest Economy?

New York is perhaps best known for its legendary finance sector. Countless mammoth banks have their headquarters here, and ‘wall street’ is known worldwide for its trading business. Yet New York is also home to a billion dollar port, being the source of thousands of jobs. It is also a major hub for manufacturing of textile and clothing industry. More importantly though, New York is a young tech-hub. With many software and new-tech startups and companies being housed in the metropolis. Lastly, with the city being one of the biggest in the U.S., and most popular worldwide, New York also has a massive gastronomy and hotelier sector, with tourism pushing a large proportion of it.

• Tech
• Finance
• Tourism

Is New York’s Economy Growing?

New York’s economy is growing. Between 2001 and 2019, the city’s GDP rose from $1,20 tril. to $1,57 tril., a 24% increase! There are some 70.000 businesses in New York City, and this number is growing annually. New York’s real estate market also makes up a huge share of its massive economic growth.

• GDP: $960,25 bil. (8% of total U.S. GDP)
• Past 20 years, 24% increase.

Is it a Good Time to Buy a House in New York? – Real Estate Market

Right now is a very good time to buy a house in New York. Low prices are almost certain, thanks to many vacancies by lettors who are no longer interested in renting out the very low rent prices. That means prices will be low, but thanks to New York’s legendary status, and cramped market, the prices are certain to pick up again. In a few years, the current prices will have multiplied, meaning an investment now will reap profits. Prices of homes are expected to increase by 9.1% over the next year.

• Home Prices Currently Low
• Expected 9.1% increase in price

Home Price Trends New York City – New York Real Estate Crash?

It seems every year there is an impending real estate crash. Yet this has not happened until now. Some experts have warned again of a crisis, yet looking at the house price index for New York, there is no evidence. The opposite in fact, the rising house price index indicates not only a healthy economy, but also a strong real estate market.

• Strong real estate market
• Rising Price Index

Most Valuable New Constructions

This graph is perhaps indicative of New York’s real estate market. Only surpassed by Dallas-Fort Worth, and the Houston-Sugarlands areas, the New York metropolitan area is among the places with the highest value of new residential construction permits. That means that new constructions are valued very highly in New York, thanks to high real estate prices, which are, thanks to these expensive new constructions also expected to remain high.

• 3rd best in the Country!

New York Real Estate Prices

New York City’s average house has a value of $660.000. Last year the median sales price on single-family residentials hit $718.000. Additionally, the amount fo sales being completed increased by over 21% compared to last year. Per square foot, you can expect to pay $341, a number 2.4% higher than last year. Manhattan is the most expensive borough, with the hotspot’s averae sale price being ata $995.000.

• Average home: $660.000
• Average sqft: $341

New York Real Estate Market Explained

NYC is certainly a buyer’s market at the moment. There are more properties for sale currently, than there are buyers. Properties were being sold, on average, almost 3% below asking price, and were typically sold after a long 151 days on the market. This is likely also due to the high supply of properties making buyers be more specific in their wishes. Also, while it may seem like rental-heaven, New York is over 50% owner-occupied, meaning that you are not alone in owning instead of renting.

• New York’s Real Estate market in-depth: New York Real Estate Investment

Is it Hard to Buy a House in New York? – Problems

As mentioned, the New York market has many homes for sale, meaning that, apart from few issues, it’s not very difficult to buy a house in New York. Different from buying an apartment in New York, buying a house will likely leave you with a more specific and satisfactory property.

Where Can You Buy a House in New York? – Detached Single-Family Residences

You may think of New York as a place where you can only buy apartments or condos. This is not the case though, although detached single-family houses are quite rare in e.g. Manhattan. You will not have much difficulty finding a house in e.g. the southern parts of Brooklyn (Bensonhurst, Sheepshead Bay, etc.) as well as Queens (e.g. Forest Hills, Woodhaven, etc.). Of course the legendary Hamptons are also prime real estate.

What is the Minimum Downpayment on a House in New York?

Mortgage is always a major topic when buying a house in New York. Even here you will need to pay at least 20% on your downpayment. The FHA loans, which would allow you to pay as little as 3.5% without significant interest rates will be hard to find in New York, as there are so few houses compliant with the regulations. If you decide on a downpayment lower than 20%, you can expect high mortgage interest rates, and of course principal mortgage insurance. With a home price of e.g. $700.000, the classic 20% downpayment is a hefty $140.000!

Tax Tip: NY state will allow you to deduct much of your mortgage interest from your taxable income!

Taxes! Where to Pay and How

Taxes on buying a house in New York: this is the fun part. Taxes in New York are structured so that you are advantaged when you buy a home instead of rent. That means you can deduct many things like mortgage interest and your New York property taxes from your taxable income! More on optimizing your taxes in our article:

• Saving Real Estate Taxes

How Much Money do you Need to Buy a House in New York?

There are of course a million ways to save money everywhere on your home. From saving on your taxes when buying a home to government programs, you need to make sure to take a look at the possible programs for you in your income-, cultural-, and geographical region.

How to Pay Less when Buying a House in New York

For people who are not able to pay a full downpayment, there are many support programs. Real estate purchases are generally encouraged with incentives and support programs. The best are for first-time homebuyers, meaning that if it is the first time that you buy a full residence, you will pay less taxes, and have other monetary incentives. More on that in our main article on buying a house.

• Less taxes for first-time homeowners

We have a full-size guide on all the additional costs you have to pay when buying a home:

Additional Real Estate Costs

Saving with Home Improvements

The planet is dying, and everyone has to do their part. That’s why many houses in New York nowadays are sold with eco-friendly upgrades already done. These include renewable energy sources such as solar power, or other variants such as more insulated roofing or smart thermostats. Having these can cut down on your recurring costs.

• Eco-friendly = Wallet-friendly

What you Need to Know About Buying a House in NYC

These are the top tips for buying a house in New York. You can be certain that if you adhere to these tips, you will have a good time, and end up satisfied homeowner of New York real estate.

People you Need to Hire to Buy a House

The most important step of the house buying step is the people who you will have fighting on your side. You want a group who are capable and empathetic. Additionally, you may need more people than you think. The list includes real estate brokers, agents, loan officers, mortgage brokers, and a real estate attorney. This is the step of the process where you will need to spend more time than you think. A good team surrounding your purchase will be a deciding factor in the quality of your home, as well as how much stress the home pruhcase will be to you.

• Real estate broker
• Agent
• Loan officers
• Mortgage broker
• Real estate attorney

It’s the Season – Spring

If you want to buy a house in Los Angeles, the time to do it is in the late winter to early spring. From January to March, the prices of homes are lower than the rest of the year, which means you can pay less for the same house that you would normally.

• Buy in Spring!

Location Location Location – New York Neighborhoods

Which neighbourhoods in New York to buy in? The old realtors adage, location location location. New York is home to five boroughs, all with a unique character and different qualities. Within these boroughs though, there is also large variation. For example, Brooklyn is home to some of the most high-end real estate areas in the whole city, while its neighborhood of Brownsville is considered the most dangerous. Therefore, which neighborhood you buy in can be decisive

Checklist – Where to Buy a House

What to look for in a location for buying your house? The location of a home, and the amenities nearby can decide your resale value, and can mean over- or under-paying on your house. This is our checklist of things you absolutely have to check out when looking at buying a house in a certain location:

• What are other homes or buildings on the block like? If
  neighboring homes or buildings are in poor condition, it could affect resale
  values.
• Schools: Are there good schools nearby? Do they have a good reputation?
• How close is the home to shopping areas such as malls? If you don’t have a car, public
  transportation? If driving, parking garages?
• What community amenities are nearby? E.g. museums, parks, restaurants, etc.

Don’t Forget Additional Costs

New York has an extra mansion tax, as well as a few other unique facets which make the additional costs here more difficult and sneaky. Be certain that you and your real estate broker have thoroughly discussed the details of all potential additional costs which you could face when buying a house.

• Real Estate – Additional Costs

How long a House has been on the Market – Beware of this

A major problem can often be unseen by you. Whether it’s shoddy renovation work which your inspector misses, a future construction project which could heavily affect resale value, or any number of things. Therefore it’s smart to always check how long a house that you are looking for has been on the market. Remember, in NYC, the average home is on the market a little under 5 months. Anything significantly longer than that can mean danger! It could also mean that a seller is just a particularly hard negotiator, and if you have the money to buy, it can still b the right purchase. So just make sure to take an extra close look.

• Hidden Problems!

Process Explained – How to Buy a House in New York

The process in New York is the same as for buying a house in the whole of USA. In short you save up, find the people that will help you through the journey, find your future home, and close on the deal. More specifically:

1. Save up for the Downpayment
2. Find a Mortgage Broker
3. Get Mortgage Preapproval
4. Get your Team Together: Attorney, Real Estate Agent, etc.
5. Start looking at Listings
6. Go to Viewings
7. Submit an Offer
8. Close

How Long does it take to Buy a House in New York

From start to end, the process is going to take a few weeks at least. The time can range anywhere from three weeks to three years, but on average you can expect about 6 months from start to finish. Remember! Even after closing it typically takes about 90 days before being able to move into the new property. Some people search for years and fail to find anything. In the end, how long you spend finding a new house depends on how well-prepared you are. On average though, in New York, people buying a house look for 50-70 days between starting the search and closing.

• 3 Weeks to 6 Years

Best Real Estate Agents in New York for Buying a House – Ranked

New York has more real estate agents than home buyers it seems. In this sea of real estate agents, all claiming to be the best, our ranking for the top 8 real estate agents in New York is below. These are NYC’s best realtors:

1. Richard Leasure (Howard Hanna Rochester)
2. John Farrell (EXIT Realty Homeward Bound)
3. Alexa Lambert (Compass)
4. Michael Kenduck (21st Century)
5. Bryan Karp (RE/Max)
6. John Lajara (RE/Max In the City)
7. Geraldine Andolina (21st Century)
8. Daniel Axtmann (Berkshire Hathaway)

New York City Explained

Counting the neighbourhoods, and finding out where one ends and another begins is a hard task in New York. The city is massive and spread out over 784 km² (303 mi²), being home to 8,4 mil. people.

• Pop. 8,4 mil.
• Area 784 km² (303 mi²)

New York’s Counties – Are NY’s Boroughs Counties?

New York City incorporates five counties, these are: New York County (Manhattan), Kings County (Brooklyn), Bronx County (The Bronx), Richmond County (Staten Island), and Queens County (Queens). In other words, each borough makes up one county.

• New York County
• Kings County
• Bronx County
• Richmond County
• Queens County

All New York Neighborhoods Mapped – Williamsburg, Midtown, etc.

With so many neighborhoods, it’s nice to see what neighborhood ends where. Where is the famous Williamsburg? See it all in the map below.

Property Taxes – New York’s Property Taxes by County

Buying a house in NYC means looking at how much you’re going to have to pay in taxes. With some districts paying more than others, this is an important part of your investment. New York property taxes are slightly more complicated than elsewhere, but broadly, the most you will be paying is in the Bronx, and least in Manhattan.

• Kings (Manhattan) – 0.65%
• Queens – 0.87%
• New York – 0.90%
• Richmond (Staten Island) – 0.91%
• Bronx – 0.97%

Neighborhoods in New York City – Where to Buy Real Estate

What neighborhood should you move to? Where are prices low, and likely to rise? These are the questions we answer here. Importantly, you will want to decide beforehand what type of neighborhood you’re looking for. There are young, trendy, and soon-to-be-gentrified areas like BedStuy, the super-rich luxury pads in Manhattan, or a little more suburban in Carroll Park or Park Slope.

New York Real Estate – Manhattan

Manhattan… Need I say more? A timeless and undisputed king in New York real estate. Neighborhoods to keep on your radar: TriBeCa, the perhaps most opulent part of New York City, or Upper East Side, which is the hottest tip in New York at the moment.

Bedford-Stuyvesant – Future Williamsburg

Williamsburg is perhaps the most famous example of gentrification worldwide. Not yet prey to gentrification is Bedforsd-Stuyvesant, where low prices, boundless amenities and a young atmosphere allow inhabitants to enjoy the big city, without its incessant tumult.

Park Slope – Where to Raise a Family in New York

Park Slope is already more famous than it was only two or three years ago. This is thanks to its near-perfect combination of proximity to the city, neighborhood safety, as well as a nice park and more. If you want to raise a family in New York City, this is where you should do it.

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