What are the Main Benefits of Investing in Queens NY Real Estate?

Investing in real estate can offer several potential benefits, including: 

 1. Rental Income: Owning rental properties can provide a steady stream of rental income, which can serve as a consistent source of cash flow. If the property isn’t paid off, as long as you buy it right, then you should have at least some cash flow and even if it isn’t significant, the wealth effect is because every month your tenants will be paying down your mortgage which will reduce your mortgage balance and increase your equity/net worth.

 2. Appreciation: Real estate properties can increase in value over time, allowing investors to build wealth through capital appreciation. This can result from market trends, improvements to the property, or strategic location choices. Here in Queens, over the last 10 years home prices have risen about 76% so you can see how much that contributes to your overall net worth as more time goes by.

 3. Portfolio Diversification: Real estate can diversify your investment portfolio, reducing risk by spreading your investments across different asset classes. Stocks, bonds, treasury bills, 401K’s, etc are all very good investments but if you are too concentrated, then you may make yourself and your finances vulnerable. Diversification is always a good an investment strategy so adding real estate to your portfolio is a great way to diversify. In addition, real estate is one of the best performing asset classes over the last 20 years.

 4. Tax Benefits: Real estate investors can often take advantage of tax benefits, such as deductions for mortgage interest, property taxes, and depreciation. Additionally, profits from the sale of certain properties may be eligible for capital gains tax benefits. If you are a high income earner, or if you are in a higher tax bracket, adding real estate to your portfolio is a good way of lowering your taxable income since there are so many write-offs that you can take advantage of.

 5. Leverage: Real estate allows investors to use leverage by borrowing money to purchase properties. This can amplify potential returns, but it also comes with increased risk. The idea of leverage is simple, just think about it like this, if you buy a million dollar home with 20% down, that means that you acquire the asset with $200K of your own money. Once you rent it out, the property should be paying for itself (and more) which means that the tenants are paying the mortgage off for you. You will obviously have expenses from time to time and you will make improvements over the years, but let’s say you hold it for the 30 years, then once it is paid off you will have a million dollar property (not even counting appreciation) and all you shelled out was the $200K down payment, maintenance/repairs, improvements, etc. All in all, you will have a huge equity and net worth build up that you were able to get due to the magic of leverage.

 6. Inflation Hedge: Real estate is often considered a hedge against inflation since property values and rental income can rise with increasing prices. If you have your money in savings, then chances are that your annual interest will not be outpacing inflation. On the other hand, if you have your money invested in assets that tend to rise with inflation, then you give yourself a hedge or some protection against rising inflation. Real Estate has definitely proven to be a good hedge against inflation.

 7. Control: Real estate investors have a degree of control over their investments, as they can make decisions about property management, renovations, and more. Although real estate is an active investment and not liquid, it does offer a certain degree of control which is not available in other investments. You can decide to self manage or hire a property manager, you can decide to renovate or just do budget friendly repairs, you can vet your own tenants or have a Realtor vet them for you, etc.

 8. Passive Income: Once properties are set up and managed effectively, they can generate passive income, requiring less day-to-day involvement compared to other businesses. The passive income that real estate can generate is by far one of the most attractive benefits of real estate investing. For example, you can buy a property in New York that generates $1,000/mo or $2,000/mo in positive cash flow (income after all expenses), this is very hard to achieve in other forms of investment and even where it is possible, it will typically require a very high amount of capital. Real estate is one of the few areas where you can generate a 10% or higher cash on cash return.

It’s important to note that Queens real estate investing also comes with risks, including property management challenges, market fluctuations, and potential financial burdens. Careful research, due diligence, and a long-term investment strategy are essential for success in this asset class. Consulting with a financial advisor or Queens real estate expert can be beneficial when considering real estate investments in the area. If you ever have any questions about investing here in Queens, feel free to Contact Us anytime 🙂