If you’ve ever considered investing in real estate, there’s no better time than the present. Interest rates are still low after the economic crash of the COVID-19 pandemic, but the market is starting to slow down after the buying frenzy we saw this summer. And Nassau County, New York, is one of the best areas to start your real estate investing career.
There are a few things you should know before you go diving into the Nassau County real estate market. Read on to learn more about this market and how you can improve your chances of a successful investment.
Overview of Nassau County
Before we dive into all the things you should know before you start investing in Nassau County real estate, let’s talk some about this area. Nassau County is immediately east of New York City and offers amazing access to all the city amenities you could dream of. There are 138 cities in Nassau County, and homes tend to sell for around $600,000.
There are fantastic schools throughout the county, many of which earn A+ ratings from expert reviewers. And property taxes are somewhat high, averaging out to a little more than $8,000 per year, or around 2 percent. Nassau County is also extraordinarily safe, with the crime rate sitting at 10 per 1,000 residents.
Consider Non-Direct Investments
When you’re getting started with real estate investing, one of the first things you should consider is whether you want to start with non-direct investments. Direct investments are what you would usually think of as real estate investing, where you own a property that you rent out or flip. However, these investments can cost a lot of money up front and require a lot of work.
Non-direct investments allow you to dip your toe into the world of real estate investing without having to dive in right away. You can own shares in a property and collect some of the rent without having to manage landlord responsibilities. You can also help to finance other people’s flip jobs in exchange for a portion of the profits at the end of the job.
Find a Mentor
As a new real estate investor, you’re going to discover that there’s a lot to learn about this industry. Without any guidance, you’re going to make mistakes, and you’ll probably lose a lot of money. One of the best ways to avoid these pitfalls and improve your chances of success is to find an investing mentor.
Talk to any friends or colleagues who invest in real estate and ask if they’ll act as your guide to the real estate process. If you don’t know anyone in the real estate investing world, look for support groups on social media or investing forums. Seek out an experienced investor who can help you learn the ropes and give you advice on how to keep your investments profitable.
Understand the Profit Model
Before you dive into the world of real estate investing, you first need to understand how investors turn a profit. The more you understand the different profit models, the better you’ll be able to evaluate what you should do with various investments.
In flipping, investors spend money repairing and updating low-value houses, preferably in desirable areas. Making cosmetic improvements can raise the value of a house enough that investors can make back the money they spent fixing it up and then a healthy profit.
Landlords make money by renting a property out to people who can’t or don’t want to buy a house. Because they handle all maintenance issues, landlords can charge enough to cover their mortgage expenses and maintenance costs, plus their profit margin.
Know How to Manage Debt
If you have good enough credit to buy a house, it can be tempting to dive right into real estate investing. It seems so simple – you get a mortgage, find a renter to cover the mortgage costs, and start raking in the cash. But you need to know how to manage your debt so you don’t wind up in over your head on your investment.
Ideally, you should pay cash for your first investment property; this will give you the largest profit margins and the lowest risk. You can use the extra profit to buy additional properties and grow your investment. At the very least, you should have a 20 percent down payment for your investment mortgage.
Do Your Mortgage Homework
If you plan to get a mortgage to cover the cost of your investment property, you need to be sure to do your homework first. Not all mortgages are created equal, and you need to figure out which one will give you the best return on your investment. You’ll also want to shop around to get the best possible interest rates on your loan.
It’s a good idea to get a fixed-rate mortgage and to pay at least 20 percent down on the loan. You’ll need to decide whether you need a thirty-year loan or you can afford a fifteen-year term with rent prices in your area. You may be able to get a loan that’s specifically directed towards real estate investors, but be wary of loan offers that seem too good to be true.
Decide Between Property Types
Aside from figuring out the best type of mortgage for you, you’ll also need to decide what sort of property you want to invest in. Many of us tend to think of residential properties when it comes to real estate investments. And it’s true that there’s a lot of market opportunity for renting or flipping houses.
However, commercial real estate can be just as lucrative and more stable than residential investments. You’re likely to get longer lease terms and more reliable tenants, but you may need a larger up-front investment. Take a long, hard look at your resources, both personal and financial, and decide which market is going to best fit your needs.
Figure Out Property Management
One of the great things about living in the internet age is that you don’t have to limit your real estate investing to the area where you live. You can invest in any market in the country as long as you have the right property management arrangements. This means you can take advantage of the real estate market opportunities in Nassau County even if you’re living in Seattle or Los Angeles.
The trick to successful cross-country investments is finding a good property manager. This will be the person who handles your tenants’ day-to-day needs, including collecting rent and arranging for maintenance. This person needs to be trustworthy, reliable, and competent enough to handle these problems for you.
Learn About Vacancy Risk
If you plan to buy a property to rent out, you need to make sure to account for vacancy risk. A vacancy is a period of time in which you don’t have a tenant in one or more of your properties. During this period, you still have to pay the mortgage and utilities, but you have no money coming in to help cover these costs.
Knowing the vacancy rate in your investment area can help you better plan for these lulls. In Nassau County as of October 2021, vacancy rates were just 2.6 percent, a historic low. This means that you’re very unlikely to have an investment property sit empty for a long period of time in the current market.
Play the Long Game
Many people go into real estate investing starry-eyed about how much money they can make in a short period of time. You see people on HGTV turning six-figure profits in just a few months and you start daydreaming about the vacations you can go on and the cars you can buy. But it’s important to remember that real estate investing is anything but a get-rich-quick scheme.
If you want to succeed in real estate investing, you need to plan to play the long game. Start with safe investments that you can collect a reliable profit from over a long period of time. Save some of that income to reinvest in other properties, and always try to minimize your risk, even if it means taking lower profit margins.
Plan to Lose
When you’re investing in real estate, it’s generally a good idea to go in planning to lose money. No matter how well you plan, the truth is that the real estate market is fickle, and you’re always going to run into surprises. You should try to avoid investing any money you can’t afford to lose if things go sideways.
Of course, you should still make the smartest investing choices possible and do everything you can to maximize your profits. But by planning as though you’ll lose that money, you’ll avoid winding up in financial ruin when some investment inevitably goes sour. And the profits you do make can go towards increasing that financial pad so you can afford to make larger or riskier investments without losing your shirt.
Diversify Your Income
Part of planning to lose money as a real estate investor is diversifying your income. As low as the vacancy rates in Nassau County are, you’re likely to run into some periods where income is slower. You don’t want to have all your eggs in one basket if the real estate market takes a downturn and your investment income goes away.
Take some of the money you earn from your real estate investments and put it into other investment opportunities. This can include putting money into both real estate and commercial investments, as well as investing in the stock market. Try to spread your money out so that you’ll always have a consistent source of income no matter what the housing market is doing.
Nassau County Market
Knowing the housing market in the area you’re investing in is critical if you want to succeed in real estate. As of this writing, the Nassau County market was a seller’s market. Real estate prices are up, median days on the market are down, and many homes are selling at or above asking price.
The Nassau County real estate market has been on a small downturn the last couple of months as the buying frenzy of this summer ebbs a bit. Far from being a negative thing, this opens up more opportunities for investors to get into the market at a lower price point. Values in this area have consistently risen since 2013, so you can expect this investment to pay off, especially over the long term.
There are several areas of Nassau County that you may want to focus on when you’re looking for investment opportunities. Great Neck is one of the top cities in the county, offering amazing schools and a top-notch community. Homes in this area tend to be a little more expensive, but there’s a thriving rental market and ample opportunity for flip houses.
Valley Stream and Massapequa are both fantastic areas for investors to look, as is Levittown. Syosset is popular with young families, and East Hills has great schools and an excellent safety rating. You may also want to look for opportunities in Floral Park, Westbury, and Long Beach, all of which have plenty of homes for sale and rent.
Learn More About Investing In Nassau County Real Estate
Investing in real estate can be a great way to make money and grow your wealth. Nassau County offers some fantastic investment opportunities no matter whether you’re flipping or leasing. Do your homework, play it safe, and diversify your income to improve your chances of a successful investment.
If you’d like to learn more about Nassau County real estate, check out the rest of our site at Dean Miller Real Estate. We make Long Island real estate easy, no matter whether you’re buying or selling. Contact us today and let us help you achieve your homeownership goals, whatever they may be.