Gea Elika's Blog, page 107

Why You Should Move to NYC in Your 20’s

Your early 20’s is when you experience a lot of important landmarks. It’s when you leave your hometown, go to university, start a career and make new friends. That’s a lot to have ahead of you but one of the biggest will be relocation. Perhaps New York is one of the places your considering. Ask most people and you’re sure to get a few arguments against living there, NYC has more than a few myths about it that aren’t true. But there’s also bound to be more than enough encouragement. For all the cliché of the term, there’s nowhere else like New York and there’s no better time to live there than in your 20’s when life is still full of possibilities. So forget about the naysayers, here’s why you should move to NYC in your 20s.

1.  You’ll learn to grow up fast

It’s no secret that New York can be a tough place to live, especially for new arrivals. Once the initial excitement and glamor have worn off a bit you’ll begin to see why. This can be a very competitive city. To survive and make it you’ll have to learn to stand on your own feet. But if you can do it you’ll find yourself a much more confident and capable of handling life’s challenges after a few years living in the city.

2. Your life and career horizons will be broadened, big time!

NYC is the place to go when you want to make something of yourself. And even if you’re not sure what that something is you’re sure to have your horizons broadened after just a short time here. There are so many ideas, ethnicities and values you’ll find in this amazing city and your 20s are the perfect time to soak all that up. it’s only when you’re young that you have the energy for that so look at it as a chance to explore your own self and the future you seek to make.

3. The nightlife scene is like nowhere else

You’ll find some of the best clubs and bars in the world in NYC. That said, a night out in the big apple is not cheap but you may never get to experience a city like this one ever again. Unless, of course, you choose to stay here permanently. Be sure to check out 230 Fifth in the Flatiron District for the city’s biggest rooftop garden lounge (picture palm trees and a panoramic view right out of a movie). If clubs aren’t your thing then there are also plenty of classy speakeasies and famous bars to check out.

4. You can always find something free to do

NYC has a very much deserved reputation for being an expensive place to live. But that doesn’t mean you have to pay for everything. There’s always a free show, concert or movie in the park, free drinks at gallery openings and public wi-fi can be found everywhere. If you’re living there as a student you can expect discounts at most museums, many of which are regarded as the best in the country.

5. There’s never a dull moment

In a city that never sleeps and with a population of roughly 8.5 million, it’s rare to go a day without seeing something new. You’ll see people from all walks of life here and there’s a good chance you’ll eventually spot a celebrity or two going about their day. A ride on the subway can sometimes be like a trip through hell but there will be days when you’ll be sharing the journey with talented violists, eccentric artists or full-on dance troupes.

There are countless other reasons to live in NYC during your 20s. Amazing and diverse food options, some of the best job opportunities and it’s easy to walk from A to B. in the end, age doesn’t really make a difference in how you experience the city. It will welcome you no matter where you’re from, what you look like or what you do.

The post Why You Should Move to NYC in Your 20’s appeared first on ELIKA Real Estate.

Buying an NYC Apartment to Rent it Out? Here’s How Do It

Each year sees billions of dollars pore into residential NYC real estate, not all of which comes from New Yorkers purchasing their primary residence. A significant portion of it comes from investors who plan to rent out the unit right after closing day. In a city where the vast majority of people are renters, this is just good business sense. For instance, in Manhattan, two-thirds of the housing stock is rental while the remaining 60% are co-ops. Becoming an NYC real estate investor will call for a hefty investment to get started. But if you do it right you can secure a very nice income and save a bundle in tax benefits. Here’s how you can do it.

1. Decide on where to buy

Real estate is all about location so choose yours carefully. If you want the least risk possible it’s better to stick with tried-and-true neighborhoods such as Tribeca, East/West Village, Midtown East and the Upper East Side. There’s always demand for these neighborhoods, so you will have to worry less about finding tenants, of course, depending on the property itself. But that high demand also translates into limited and more expensive inventory, so you’ll need to be ready to wait and pay up once you do find the right property.

If Manhattan real estate is out of your price range, then look for properties in emerging neighborhoods in Brooklyn, Queens and the Bronx. You may face less competition from other investors and property taxes that may potentially return higher yields. Wondering how to identify emerging neighborhoods? Look for the following:

A decline in the DOM (days on the market) of properties in the area.
Large investment in infrastructures such as transit option, schools, and public spaces.
A lot of new constructions and conversions, but be careful that it is not rental buildings that could pressure your rental yield.

2. Decide on what to buy

The type of property you invest in will decide whether you’ve bought a golden goose or a lemon. For a start, avoid co-ops because they just aren’t appropriate for this scenario. They may be on average 30% less expensive than condos, but most co-ops have strict house rules that don’t allow subletting until you’ve lived in the unit for at least two years. And even if you do find one that does allow it right off the bat, they can always change the rules at any point.

Condos present the best choice due to their liberal policies, and you can begin renting them out from day one. Still, though, they are more expensive, so you must be ready to more money down when you buy. If you’re thinking you’d rather spread your investment around rather than putting all your eggs in one basket, buying multiple studio apartments can also potentially be a smart investment. They’re cheaper to pick up and tend to generate higher yields than larger apartments however the flip side is that they have short life cycles than larger units and less emotional value so despite the potential for short-term gains a 2 Bedroom apartment over the longer term will likely outperform in capital appreciation.

Also, when looking at properties, pay attention to the competition. Avoid areas with a high rental inventory and have buildings that come with a lot of extra amenities or concessions such as an extra free month or two being included with the lease. Most of these buildings offering concessions tend to be in new constructions that are focused offer more bells and whistles and have deeper pockets to offer incentives, which highlights the reason to find unique properties with desirable characteristics so that your property stands out such as a townhouse apartment on a lower floor. Lastly, don’t overlook auxiliary services around the property. If there’s a subway station, a nail salon, grocery store and other services close by that can be a big draw for potential tenants.

3. Calculate your returns

Like any investment, you don’t want to buy without first calculating what kind of returns you can expect. Getting a rough estimate on your returns is relatively simple. First, figure out how much you can rent out the property for. You can do this by looking at the past and currently available comparable rental properties in the neighborhood. Just keep in mind that the last list price for a rental online may not reflect the actual signed lease which remains private.

Next, determine your cost basis. Make sure to include not just your initial investment of sales price and closing costs but also upkeep such as common charges, maintenance, and property taxes. This is known as the cap rate (capitalization rate). It starts by calculating your Net Operating Income (NOI) and then subtracting your operating expenses. This includes everything you spend to run the building but excludes major capital expenditures or assessments to increase either the value or lifespan of the property. Once you have your NOI, you divide the price or value of the property onto it.

Average yields are difficult to estimate as there are so many variables in play such as the neighborhood and whether you’re financing. In New York, it’s more of an appreciation game rather than yield game. This is a global market which can remain competitive even in a down economy so look at long-term benefits like appreciation. But, in general, a Manhattan condo has a rental yield of 3-4% after common charges and taxes are deducted.

As you move through negotiations and towards a binding contract of sale you’ll have a better handle on these estimates so keep a close eye on them.

4. Find tenants and play landlord

Now that you have the property it’s time to play landlord. You have to be sure you can handle the responsibilities of this as you’ll need a solution for almost every problem that may arise. Potential tenants will need to be vetted, maintenance and repairs may be needed from time to time, and you might have to deal with the cost of a bad tenant.

If you’ve bought multiple properties it would be a wise to purchase umbrella insurance to cover all of them. If management is too much for you, consider hiring a property manager.

The post Buying an NYC Apartment to Rent it Out? Here’s How Do It   appeared first on ELIKA Real Estate.

How to Save Money on Rent in New York City

Describing New York City in just one sentence is impossible. After all, New York City is home to a plethora of celebrities, world-class restaurants and bars, scenic skylines, and a seemingly endless hustle and bustle. If you’re in the market for a new apartment, New York City is also home to some notoriously steep rental prices even though recently the market has softened. According to recent REIS market data, the average asking price for rent in New York City has risen to $3,017, compared to the national average of $1,062.

So why is renting in the Big Apple so expensive?

Perhaps the most obvious reason of all is the spatial limitations of living in such a metropolitan area. When a large number of people want to live within the same area, the price of land skyrockets. This translates to steeper rental prices. Another reason rental prices have inflated is that of property taxes. New York holds the second highest property tax rates on apartments in the U.S. To compensate for the added expense, a portion of this cost gets carried over to tenants.

New York City’s zoning jurisdictions also regulate building specifications (like lot size, placement, and height) of new properties, forcing wealthy inhabitants to branch out from prime locations, and place high bids in areas where rent was more affordable.

As a general rule of thumb, your annual salary should be 40 times your monthly rent. In many cases, your landlord will require that you prove this prerequisite before renting to you. Based on a typical college graduate salary at a Fortune 500 (usually between $60,000-$80,000), you should aim to spend around $1,500-$2,000 per month.

While it may be concerning that this amount falls short of the city’s average of $3,017, rest assured that there are some actionable methods for finding apartments within your budget.

Avoid the City Center

If you’re on a budget, you might want to put your dreams of living near Midtown or Downtown on hold, as moving away from central locations will save you a significant amount of money on rent. There are a number of neighborhoods outside the city that host affordable apartments with reasonable commute times. Take Brooklyn’s Bed-Stuy, Clinton Hill, Bushwick and Gowanus neighborhoods for example.

According to StreetEasy, most apartments in these areas cost less than $1,500 per roommate, with commute times of 15-20 minutes to Dumbo or the Financial District, or just below 30 minutes to Union Square. Morningside Heights in Upper Manhattan (near Columbia University) is also home to two and three-bedroom apartments priced similarly to their Brooklyn counterparts. If you’re willing to pay a little extra for privacy, there are also some studio apartment listings around $1,800 per month.

Move in with Roommates

Although living with someone you don’t know may not be as appealing as living with a best friend or significant other, having a roommate (or multiple) is a great way to cut costs on rent, and perhaps move into a nicer apartment or area than you could afford on your own. You will, after all, become more familiar with your roommates over time, and also have someone to split up the chores with. Factoring into your budget your share for utilities, cable, phone, and internet should give you an idea as to the total monthly cost of the apartment.

You will also want to leave room in your budget for transportation, maintenance fees, renters insurance, and any other miscellaneous costs you did not anticipate initially. This can be a lot to keep track of, especially amongst the little purchases we make (and subsequently forget) every day. Fortunately, mobile banking apps like Chime can help you save money automatically to free up your budget for living expenses. This is especially useful if you haven’t gotten into the habit of tracking your finances.

Communicate with Brokers

As with most things, the early bird gets the worm. You should begin your apartment search early on, ideally 2-3 months in prior to the date you’d like to move in. This allows time for finding the right apartment, the application process which includes credit and background checks before you move in, and also gives you a head start on applicants who started their searches too close to their move-in date. And while looking online is the most convenient of options, don’t forgo the advantages of speaking with brokers directly.

Advertising listings online cost money and overwhelm brokers with an influx of emails from unqualified applicants. Liam McCarthy, a licensed broker, operating in Brooklyn and Manhattan, admits that 75% of his best listings never make it online.

Instead, applicants who made their interest apparent in person or over the phone are notified of a new listing’s availability. Similarly, landlords who are familiar with you and see you as an ideal tenant may be more willing to accommodate your financial situation. Going the extra mile to establish that personal connection just might be the difference in finding an ideal apartment, and saving money in the process.

The post How to Save Money on Rent in New York City appeared first on ELIKA Real Estate.

How to Become a Real Estate Agent in New York

On the surface, being an NYC real estate agent looks like a career made in heaven. No 9-5 work schedule, unlimited earning potential and the chance to rub shoulders with some of the biggest names in New York. But as with a lot of things, there’s a lot more to the job than first meets the eye. Before embarking on a career in real estate you need to carefully consider what you’re getting into. Perhaps you love talking with people, making deals, and have a passion for interior design and architecture. But what about reading market reports, dealing with crushingly long work weeks and often going months without any income?

Being a real estate agent is not for everyone, especially in New York City. The market is fiercely competitive here and most newbie agents wash out in the first year because they didn’t have what it takes. But if you can handle the workload, and make it through your first year, the sky can be the limit in what you can earn.

First off: Should you become a real estate agent?

To most outsiders, being a real estate agent looks like an easy gig. All you need to do is find a listing, use every trick in the book to make a buyer sign off on it, then hold out your hand for thousands of dollars in commission fees. Easy, right?

Not exactly. This is a tough business, filled with hidden costs, clients who cancel at the last minute, listings that don’t sell or overpriced and prolonged haggling over fees that make up the entirety of your income. To make it as a real estate agent you need to have the extensive market knowledge, be on call 24-7 and have enough savings to hold you up over long periods without any income. The best agents work crazy long days, are extremely dedicated and are always on their feet or on the phone chasing down new leads and following up with clients. So do some soul searching and consider the pros and cons before you take the following steps:

Be “generally” qualified.
Find a class (either online or in a classroom) and complete the 75 hours of class time and the in-class exam.
Register at the NYS Department of Licensing to complete the state test.
Choose a real estate firm
Work yourself up the ladder.

Steps 1-3 are pretty straightforward. It’s step 4 and especially 5 that things start to get really difficult. Now let’s break down each of the four steps.

Step 1. Be “generally” qualified

As stated in the licensing law (referred to by brokers as “Article 12-A”), to be a real estate agent you must be over 18, have no felony record and must be current on any child support. However, if you do have a felony you may still be able to get a license. That decision is up to the New York Department of State. The DOS will take several things into account, such as the nature of the felony, the license you desire and the court disposition papers.

Step 2. Find a class

It’s fairly easy to get a real estate license in New York compared to other states. You only need to complete 75 hours of an accredited real estate course. By comparison, in the state of Texas, you need to complete a total of 180 hours. You can take the course either online or in a classroom at a real estate school. An online course lets you go at your own pace but there’s something nice about attending a school and meeting your classmates. You might even make useful connections that will help you in your first years in the industry. At a minimum, a licensing course will cover the following:

Basic principles of real estate
Commercial and investment properties
Law of agency
Mortgage and loans
Human rights and fair housing
Real estate finance, construction
Condominiums and cooperatives
Environmental issues
Work ethics

At the end of the course, you’ll have to take an in-class exam. If you pass you’ll then be allowed to take the state exam and acquire your license.

Step 3. Complete the state exam

You now have a course certificate but before you can start working, you need to take the state exam with the NYS Department of Licensing. This is a little more daunting as only a handful of state exams are administered each season. For New Yorkers without a car, the only convenient locations are Franklin Square in Long Island and the Financial District in Manhattan. Places for these sites can fill up months in advance so plan ahead.

The 100-question test is pretty easy with most of the questions presented in a “which of these things is not like the other” way. A quick search online can bring up practice exams and sample questions to help you prepare.  Before you can take the exam, you need to register for it using the eAccess system. There’s a $15 fee to take the exam and a non-refundable $50 to apply for your license. To pass, you have to get a score of at least 70. If all goes well, you should have your license within a few days.

Also, if you plan on working in states besides New York then you need to know the real estate reciprocity and portability laws for New York. At present, New York has a reciprocity agreement with 9 states:

Arkansas
Colorado
Connecticut
Georgia
Massachusetts
Mississippi
Oklahoma
Pennsylvania
West Virginia

Step 4. Choose a real estate firm

Your career in real estate will depend to a large extent on the firm you choose. Most people drop out in the first year because they chose the wrong one. When deciding on the right brokerage to work for, you need to consider the pros and cons of the two types, large brokerages, and small brokerages.

Also, regardless of the type of brokerage you choose, there are a few main things you’ll want to know when choosing one such as the commission split, what expenses you’ll need to cover and what kinds of leads you can expect. Their goals should be in-line with yours so weigh your options carefully.

Large Brokerages

A large brokerage is a company that sells the rights to use their name, branding and business model to agents. For each deal the agent closes, a set percentage of it is allocated to the company. Most of these large brokerages are privately owned with their own rules and regulations. Be sure to read them carefully before signing anything.

Pros

Instant Credibility – Brand recognition is the biggest advantage to large brokerages and the reason why most new agents chose to work for them. They’ve already done the hard work of building the brand. A reputation like that can go a long way in helping new agents establish trust with potential clients.
Multiple Offices – Large brokerages tend to be companies with tens if not hundreds of offices across the state. This makes it easy for you to transition to other offices in the city that are more convenient for your clients.
Technology – Because of their size, large brokerages tend to get discounts on software and tech support. This means you get access to top shelf transaction management software and CRM software. Having tech support is also a huge plus as it means you’ll spend less time figuring out why something isn’t working and more time selling real estate.

Cons

Their size makes them impersonal – Some agents, especially new ones, feel that the size of large brokerages makes them feel impersonal. They’re not as concerned with personal growth and development as small brokerages.

Boutique Brokerages

In contrast to large brokerages, small brokerages are generally owned by one small company and managed by a single broker. Don’t be fooled, smaller doesn’t mean less successful. A well-managed one can often punch well above its weight.

Pros

More Individual Attention – These types of firms are much smaller, meaning that each agent’s individual contribution makes a difference to the company’s bottom line. As such, they tend to spend more time showing the ropes to new agents.
Less Competition for Leads – Since there are fewer people working at the firm compared to a large brokerage, the competition for leads is much less intense. It’s pretty common for experienced agents to let the newbies handle the majority of new leads.
More Flexibility – A smaller workforce means there’s less red tape and no corporate office to answer to. This means policies and best practices can be changed overnight making them very flexible in an evolving market.
More Teamwork – A smaller workforce translates into closer integration. small brokerages are more team orientated with all the agents ready to help one another out at every opportunity. Such a cooperative environment stands in stark contrast to the sometimes cold atmosphere of large brokerages.

Cons

Smaller Budgets – A smaller company means a smaller budget, meaning less money for advertising and tech support.
Smaller Brand – Depending on how long they’ve been in the game, they may have less recognition outside of their immediate neighborhood. This can make establishing trust with high-end clients a tougher sell.

Step 5. Climb the ladder

Now comes the most difficult part, actually making it as a real estate agent. Expect some heavy start-up fees (ads, business cards, desk rental fees etc.) working five, six, seven days a week without a guaranteed income and dealing with sometimes flaky and difficult clients. In NYC, a closing can take four or so months after an accepted offer, so be prepared to wait a while before you can pick up your first commission check.

Being a real estate agent is something you very much learn on the job. Your training course may have schooled you in the technical aspects of it, but you’ll only get a real feel for it once you have some on the job experience. Good coaching and mentoring are a must in your first year. When starting out this should be a top priority when choosing a brokerage. Even top agents with years in the business still have mentors they look up to. Lastly, make friends. In this business, contacts are everything so put yourself out there and be aware that everyone at the firm is potentially helpful in later years. The same goes for any attorneys, contractors, and architects that you’re sure to meet along the road.

The post How to Become a Real Estate Agent in New York appeared first on ELIKA Real Estate.

How to Become a NYC Real Estate Agent

On the surface, being an NYC real estate agent looks like a career made in heaven. No 9-5 work schedule, unlimited earning potential and the chance to rub shoulders with some of the biggest names in New York. But as with a lot of things, there’s a lot more to the job than first meets the eye. Before embarking on a career in real estate you need to carefully consider what you’re getting into. Perhaps you love talking with people, making deals, and have a passion for interior design and architecture. But what about reading market reports, dealing with crushingly long work weeks and often going months without any income?

Being a real estate agent is not for everyone, especially in New York City. The market is fiercely competitive here and most newbie agents wash out in the first year because they didn’t have what it takes. But if you can handle the workload, and make it through your first year, the sky can be the limit in what you can earn.

First off: Should you become a real estate agent?

To most outsiders, being a real estate agent looks like an easy gig. All you need to do is find a listing, use every trick in the book to make a buyer sign off on it, then hold out your hand for thousands of dollars in commission fees. Easy, right?

Not exactly. This is a tough business, filled with hidden costs, clients who cancel at the last minute, listings that don’t sell or overpriced and prolonged haggling over fees that make up the entirety of your income. To make it as a real estate agent you need to have the extensive market knowledge, be on call 24-7 and have enough savings to hold you up over long periods without any income. The best agents work crazy long days, are extremely dedicated and are always on their feet or on the phone chasing down new leads and following up with clients. So do some soul searching and consider the pros and cons before you take the following steps:

Be “generally” qualified.
Find a class (either online or in a classroom) and complete the 75 hours of class time and the in-class exam.
Register at the NYS Department of Licensing to complete the state test.
Choose a real estate firm
Work yourself up the ladder.

Steps 1-3 are pretty straightforward. It’s step 4 and especially 5 that things start to get really difficult. Now let’s break down each of the four steps.

Step 1. Be “generally” qualified

As stated in the licensing law (referred to by brokers as “Article 12-A”), to be a real estate agent you must be over 18, have no felony record and must be current on any child support. However, if you do have a felony you may still be able to get a license. That decision is up to the New York Department of State. The DOS will take several things into account, such as the nature of the felony, the license you desire and the court disposition papers.

Step 2. Find a class

It’s fairly easy to get a real estate license in New York compared to other states. You only need to complete 75 hours of an accredited real estate course. By comparison, in the state of Texas, you need to complete a total of 180 hours. You can take the course either online or in a classroom at a real estate school. An online course lets you go at your own pace but there’s something nice about attending a school and meeting your classmates. You might even make useful connections that will help you in your first years in the industry. At a minimum, a licensing course will cover the following:

Basic principles of real estate
Commercial and investment properties
Law of agency
Mortgage and loans
Human rights and fair housing
Real estate finance, construction
Condominiums and cooperatives
Environmental issues
Work ethics

At the end of the course, you’ll have to take an in-class exam. If you pass you’ll then be allowed to take the state exam and acquire your license.

Step 3. Complete the state exam

You now have a course certificate but before you can start working, you need to take the state exam with the NYS Department of Licensing. This is a little more daunting as only a handful of state exams are administered each season. For New Yorkers without a car, the only convenient locations are Franklin Square in Long Island and the Financial District in Manhattan. Places for these sites can fill up months in advance so plan ahead.

The 100-question test is pretty easy with most of the questions presented in a “which of these things is not like the other” way. A quick search online can bring up practice exams and sample questions to help you prepare.  Before you can take the exam, you need to register for it using the eAccess system. There’s a $15 fee to take the exam and a non-refundable $50 to apply for your license. To pass, you have to get a score of at least 70. If all goes well, you should have your license within a few days.

Also, if you plan on working in states besides New York then you need to know the real estate reciprocity and portability laws for New York. At present, New York has a reciprocity agreement with 9 states:

Arkansas
Colorado
Connecticut
Georgia
Massachusetts
Mississippi
Oklahoma
Pennsylvania
West Virginia

Step 4. Choose a real estate firm

Your career in real estate will depend to a large extent on the firm you choose. Most people drop out in the first year because they chose the wrong one. When deciding on the right brokerage to work for, you need to consider the pros and cons of the two types, large brokerages, and small brokerages.

Also, regardless of the type of brokerage you choose, there are a few main things you’ll want to know when choosing one such as the commission split, what expenses you’ll need to cover and what kinds of leads you can expect. Their goals should be in-line with yours so weigh your options carefully.

Large Brokerages

A large brokerage is a company that sells the rights to use their name, branding and business model to agents. For each deal the agent closes, a set percentage of it is allocated to the company. Most of these large brokerages are privately owned with their own rules and regulations. Be sure to read them carefully before signing anything.

Pros

Instant Credibility – Brand recognition is the biggest advantage to large brokerages and the reason why most new agents chose to work for them. They’ve already done the hard work of building the brand. A reputation like that can go a long way in helping new agents establish trust with potential clients.
Multiple Offices – Large brokerages tend to be companies with tens if not hundreds of offices across the state. This makes it easy for you to transition to other offices in the city that are more convenient for your clients.
Technology – Because of their size, large brokerages tend to get discounts on software and tech support. This means you get access to top shelf transaction management software and CRM software. Having tech support is also a huge plus as it means you’ll spend less time figuring out why something isn’t working and more time selling real estate.

Cons

Their size makes them impersonal – Some agents, especially new ones, feel that the size of large brokerages makes them feel impersonal. They’re not as concerned with personal growth and development as small brokerages.

Boutique Brokerages

In contrast to large brokerages, small brokerages are generally owned by one small company and managed by a single broker. Don’t be fooled, smaller doesn’t mean less successful. A well-managed one can often punch well above its weight.

Pros

More Individual Attention – These types of firms are much smaller, meaning that each agent’s individual contribution makes a difference to the company’s bottom line. As such, they tend to spend more time showing the ropes to new agents.
Less Competition for Leads – Since there are fewer people working at the firm compared to a large brokerage, the competition for leads is much less intense. It’s pretty common for experienced agents to let the newbies handle the majority of new leads.
More Flexibility – A smaller workforce means there’s less red tape and no corporate office to answer to. This means policies and best practices can be changed overnight making them very flexible in an evolving market.
More Teamwork – A smaller workforce translates into closer integration. small brokerages are more team orientated with all the agents ready to help one another out at every opportunity. Such a cooperative environment stands in stark contrast to the sometimes cold atmosphere of large brokerages.

Cons

Smaller Budgets – A smaller company means a smaller budget, meaning less money for advertising and tech support.
Smaller Brand – Depending on how long they’ve been in the game, they may have less recognition outside of their immediate neighborhood. This can make establishing trust with high-end clients a tougher sell.

Step 5. Climb the ladder

Now comes the most difficult part, actually making it as a real estate agent. Expect some heavy start-up fees (ads, business cards, desk rental fees etc.) working five, six, seven days a week without a guaranteed income and dealing with sometimes flaky and difficult clients. In NYC, a closing can take four or so months after an accepted offer, so be prepared to wait a while before you can pick up your first commission check.

Being a real estate agent is something you very much learn on the job. Your training course may have schooled you in the technical aspects of it, but you’ll only get a real feel for it once you have some on the job experience. Good coaching and mentoring are a must in your first year. When starting out this should be a top priority when choosing a brokerage. Even top agents with years in the business still have mentors they look up to. Lastly, make friends. In this business, contacts are everything so put yourself out there and be aware that everyone at the firm is potentially helpful in later years. The same goes for any attorneys, contractors, and architects that you’re sure to meet along the road.

The post How to Become a NYC Real Estate Agent appeared first on ELIKA Real Estate.

How to Become an NYC Real Estate Agent

On the surface, being an NYC real estate agent looks like a career made in heaven. No 9-5 work schedule, unlimited earning potential and the chance to rub shoulders with some of the biggest names in New York. But as with a lot of things, there’s a lot more to the job than first meets the eye. Before embarking on a career in real estate you need to carefully consider what you’re getting into. Perhaps you love talking with people, making deals, and have a passion for interior design and architecture. But what about reading market reports, dealing with crushingly long work weeks and often going months without any income?

Being a real estate agent is not for everyone, especially in New York City. The market is fiercely competitive here and most newbie agents wash out in the first year because they didn’t have what it takes. But if you can handle the workload, and make it through your first year, the sky can be the limit in what you can earn.

First off: Should you become a real estate agent?

To most outsiders, being a real estate agent looks like an easy gig. All you need to do is find a listing, use every trick in the book to make a buyer sign off on it, then hold out your hand for thousands of dollars in commission fees. Easy, right?

Not exactly. This is a tough business, filled with hidden costs, clients who cancel at the last minute, listings that don’t sell or overpriced and prolonged haggling over fees that make up the entirety of your income. To make it as a real estate agent you need to have the extensive market knowledge, be on call 24-7 and have enough savings to hold you up over long periods without any income. The best agents work crazy long days, are extremely dedicated and are always on their feet or on the phone chasing down new leads and following up with clients. So do some soul searching and consider the pros and cons before you take the following steps:

Be “generally” qualified.
Find a class (either online or in a classroom) and complete the 75 hours of class time and the in-class exam.
Register at the NYS Department of Licensing to complete the state test.
Choose a real estate firm
Work yourself up the ladder.

Steps 1-3 are pretty straightforward. It’s step 4 and especially 5 that things start to get really difficult. Now let’s break down each of the four steps.

Step 1. Be “generally” qualified

As stated in the licensing law (referred to by brokers as “Article 12-A”), to be a real estate agent you must be over 18, have no felony record and must be current on any child support. However, if you do have a felony you may still be able to get a license. That decision is up to the New York Department of State. The DOS will take several things into account, such as the nature of the felony, the license you desire and the court disposition papers.

Step 2. Find a class

It’s fairly easy to get a real estate license in New York compared to other states. You only need to complete 75 hours of an accredited real estate course. By comparison, in the state of Texas, you need to complete a total of 180 hours. You can take the course either online or in a classroom at a real estate school. An online course lets you go at your own pace but there’s something nice about attending a school and meeting your classmates. You might even make useful connections that will help you in your first years in the industry. At a minimum, a licensing course will cover the following:

Basic principles of real estate
Commercial and investment properties
Law of agency
Mortgage and loans
Human rights and fair housing
Real estate finance, construction
Condominiums and cooperatives
Environmental issues
Work ethics

At the end of the course, you’ll have to take an in-class exam. If you pass you’ll then be allowed to take the state exam and acquire your license.

Step 3. Complete the state exam

You now have a course certificate but before you can start working, you need to take the state exam with the NYS Department of Licensing. This is a little more daunting as only a handful of state exams are administered each season. For New Yorkers without a car, the only convenient locations are Franklin Square in Long Island and the Financial District in Manhattan. Places for these sites can fill up months in advance so plan ahead.

The 100-question test is pretty easy with most of the questions presented in a “which of these things is not like the other” way. A quick search online can bring up practice exams and sample questions to help you prepare.  Before you can take the exam, you need to register for it using the eAccess system. There’s a $15 fee to take the exam and a non-refundable $50 to apply for your license. To pass, you have to get a score of at least 70. If all goes well, you should have your license within a few days.

Also, if you plan on working in states besides New York then you need to know the real estate reciprocity and portability laws for New York. At present, New York has a reciprocity agreement with 9 states:

Arkansas
Colorado
Connecticut
Georgia
Massachusetts
Mississippi
Oklahoma
Pennsylvania
West Virginia

Step 4. Choose a real estate firm

Your career in real estate will depend to a large extent on the firm you choose. Most people drop out in the first year because they chose the wrong one. When deciding on the right brokerage to work for, you need to consider the pros and cons of the two types, large brokerages, and small brokerages.

Also, regardless of the type of brokerage you choose, there are a few main things you’ll want to know when choosing one such as the commission split, what expenses you’ll need to cover and what kinds of leads you can expect. Their goals should be in-line with yours so weigh your options carefully.

Large Brokerages

A large brokerage is a company that sells the rights to use their name, branding and business model to agents. For each deal the agent closes, a set percentage of it is allocated to the company. Most of these large brokerages are privately owned with their own rules and regulations. Be sure to read them carefully before signing anything.

Pros

Instant Credibility – Brand recognition is the biggest advantage to large brokerages and the reason why most new agents chose to work for them. They’ve already done the hard work of building the brand. A reputation like that can go a long way in helping new agents establish trust with potential clients.
Multiple Offices – Large brokerages tend to be companies with tens if not hundreds of offices across the state. This makes it easy for you to transition to other offices in the city that are more convenient for your clients.
Technology – Because of their size, large brokerages tend to get discounts on software and tech support. This means you get access to top shelf transaction management software and CRM software. Having tech support is also a huge plus as it means you’ll spend less time figuring out why something isn’t working and more time selling real estate.

Cons

Their size makes them impersonal – Some agents, especially new ones, feel that the size of large brokerages makes them feel impersonal. They’re not as concerned with personal growth and development as small brokerages.

Boutique Brokerages

In contrast to large brokerages, small brokerages are generally owned by one small company and managed by a single broker. Don’t be fooled, smaller doesn’t mean less successful. A well-managed one can often punch well above its weight.

Pros

More Individual Attention – These types of firms are much smaller, meaning that each agent’s individual contribution makes a difference to the company’s bottom line. As such, they tend to spend more time showing the ropes to new agents.
Less Competition for Leads – Since there are fewer people working at the firm compared to a large brokerage, the competition for leads is much less intense. It’s pretty common for experienced agents to let the newbies handle the majority of new leads.
More Flexibility – A smaller workforce means there’s less red tape and no corporate office to answer to. This means policies and best practices can be changed overnight making them very flexible in an evolving market.
More Teamwork – A smaller workforce translates into closer integration. small brokerages are more team orientated with all the agents ready to help one another out at every opportunity. Such a cooperative environment stands in stark contrast to the sometimes cold atmosphere of large brokerages.

Cons

Smaller Budgets – A smaller company means a smaller budget, meaning less money for advertising and tech support.
Smaller Brand – Depending on how long they’ve been in the game, they may have less recognition outside of their immediate neighborhood. This can make establishing trust with high-end clients a tougher sell.

Step 5. Climb the ladder

Now comes the most difficult part, actually making it as a real estate agent. Expect some heavy start-up fees (ads, business cards, desk rental fees etc.) working five, six, seven days a week without a guaranteed income and dealing with sometimes flaky and difficult clients. In NYC, a closing can take four or so months after an accepted offer, so be prepared to wait a while before you can pick up your first commission check.

Being a real estate agent is something you very much learn on the job. Your training course may have schooled you in the technical aspects of it, but you’ll only get a real feel for it once you have some on the job experience. Good coaching and mentoring are a must in your first year. When starting out this should be a top priority when choosing a brokerage. Even top agents with years in the business still have mentors they look up to. Lastly, make friends. In this business, contacts are everything so put yourself out there and be aware that everyone at the firm is potentially helpful in later years. The same goes for any attorneys, contractors, and architects that you’re sure to meet along the road.

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A Bridge Loan to a New Home

If you already own a home, you can sell it, and use the proceeds to fund the down payment and closing costs. You can arrange it to have both the sale and purchase closed on the same day. Alternatively, you may not wish to wait until your house sells to buy a new one.

One option is to obtain a bridge loan, or a short-term loan to fill the financing gap.

How it works

You have found the perfect home. However, you have not sold your existing property yet, which likely presents a funding problem. Hence, a bridge loan comes into play. You are “bridging” the gap between buying a new property and selling your old one. This is an option you can use to obtain cash that you can utilize to pay the down payment and closing costs on your new home, prior to selling your existing property.

In essence, the lender uses the equity in your existing home as collateral, even though you have not sold it yet. For instance, if your home is worth $800,000 and you have an existing $350,000 mortgage, you may borrow $200,000 to cover your financing on the new property. There is an additional wrinkle, though. Typically, your borrowing is limited to 80% of the value of both homes.

Bridge loans are designed to exist for a short period, generally only a few months.

Advantages

If you are approved for a bridge loan, you could drop the mortgage contingency clause from your offer. This can make it stronger, although we advise proceeding with caution, including retaining the contingency if the lender rejects your mortgage due to factors related to the building.

You do not risk losing out on a great home since you do not have to wait until your existing property sells to purchase a new one. However, we caution that you should utilize a bridge loan only in cases where you are highly confident your home will sell quickly.

Disadvantages

You are basing the decision on the premise that the housing market remains strong. This can change quickly, however. Bridge loans were accessible in the years leading up to the 2007-2008 housing crash. Should the situation change rapidly, you are in a difficult position since you are paying a higher loan balance on two homes.

You are also likely to pay a higher interest rate on a bridge loan than a conventional mortgage.

 What else you need to know

Since the loans are riskier, banks require the borrower to have excellent credit. This includes a low debt-to-income ratio and a high credit score. Lenders are also going to want to see that you have a lot of equity in your existing home.

Your personal risk is mitigated somewhat if you have a lot of equity in your home and you are purchasing a less expensive place. If you have strong financials such as a high income and little debt, a bridge loan can work in your favor. Still, it is important to understand the risks prior to entering into a bridge loan, and if you are not comfortable, you should not do it.

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How to Sell your Apartment ‘as is’

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Selling an NYC apartment can be a lot of work. You have to declutter every room, splash up a new paint job, update your embarrassedly outdated kitchen and more before you can even think about doing an open house, negotiating with buyers and getting through the whole sales process. Fortunately, if you’re looking for an easier way there is one. selling your apartment in an ‘as is’ condition. This is when you forgo doing any repairs or renovations and sell your apartment in the very condition it’s in now.

However, doing this is not easy. The very words ‘as is’ in the listing description tends to set off alarm bells in buyer’s heads. And in the New York market these days it’s even harder to get buyers interested. But if you need to sell, and the funds just aren’t there for a renovation, here’s what you can do to give you the best chance of success.

Step 1. List it the right way

There’s no point in trying to hide the fact that you’re selling an ‘as is’ apartment. Make it crystal clear in the listing description so you can attract bargain hunters and avoid buyers who aren’t interested in a fixer-upper. With that in mind, you need to properly price your apartment. Otherwise, it will sit, and the value will go down steadily. Have an appraisal done or consult your broker to estimate so you know what it’s market value is and aim for that price once it hits the market. And if it has any desirable elements, such as a nice view, large size, well-proportioned rooms or good location, make sure your broker plays that up in the description.

Step 2. Make what repairs and updates you can

The whole reason you’re listing the apartment ‘as is’ is because you don’t want or have the money needed for a major renovation. But who says a renovation has to be a major one? just a few updates can lessen what defects are in place and make the home far more appealing.

At the very least you should put up a new paint job. Decorators white will attract the most buyers as it makes it easy for them to choose whichever paint scheme they desire. If your kitchen cabinets are looking a bit outdated, have them refaced.

Installing some new appliances can also sweeten the deal. When making any changes, the costs to make them must be carefully weighed against the cost and effort to sell. So do the math before you make any costly repairs or upgrades.

Step 3. Declutter and clean

First impressions are everything in a home sale so declutter everything. Buyers will want to see how they can use the space. Which will be difficult if all your possessions are still in place. Once decluttered and organized, hire a cleaning company for a professional deep clean. You’ll also want to keep the place extremely clean for each showing.

Step 4. Stage the apartment

Staging isn’t just for high-end properties. It can also pay off if your place is worth less than a million. If you can get the apartment empty, staging is the best option as it allows buyers to visualize how the space can be used and make it look like it needs less work than it does. Also, empty apartments feel smaller than they actually are.

Professional stagers have an eye for detail and know how to make a space appeal to the right buyers. If it’s not possible to make the apartment empty, try moving around the existing furniture and replacing any old curtains or pillow covers. Make it as fresh, neutral and appealing as possible.

Step 5. Know the market and the buyers

Expect some tough negotiations with potential buyers once you do attract some interest. They’ll be sure to point out any flaws and possibly ask for repairs or contingencies as part of the deal. It’s up to you whether you decline or concede to their demands.

If you know the market, both across NYC and your neighborhood, you’ll have a better handle on negotiations. The same goes for knowing the buyers, what they’re looking for and how long they’ve been looking. A good sales agent will know how to handle this step so if you want the best chance of success don’t try and sell without one.

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What Home Improvement Projects Have the Best ROI?

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Every homeowner loves a good renovation. However, the motivation behind a renovation varies from one person to another. For some, it’s a mix of personal preference and increased home value. For others, it’s solely the latter. But even veteran renovators know that money invested in a renovation is never a 1:1 return from your homes future price tag. One also has to look to the future at emerging trends and new technologies that are changing what people expect to find in a modern home. With that in mind here are the home improvement projects with the best return on investment (ROI) in 2018.

1. Smart technologies

In a 2017 survey by the brokerage firm T3 SIXTY, 40% of realtors believe that smart homes sell faster, regardless of the price. This is borne out by buyers as well. In the 2017 Global Luxury Real Estate Report, 76% of buyers agree: having a smart home is important to me. Upgrading your NYC apartment with smart technology is much easier than taking on a major renovation. If you’re not sure where to start, look into smart appliances.

In the 2017 Concept Community study by MFE, 18.2% of people listed appliances as the smart home feature with the highest ROI. And let’s not forget smart home security cameras, smart locks, and smart shades to name just a few of the options out there.

2. Energy Efficiency

Most buyers nowadays, especially millennials, are all about energy efficiency. Just a few upgrades to your HVAC, water heater, windows, and lighting can make big cuts in your energy bills and save a bundle of money over time. Low-flow water fixtures can cut your water consumption by half while double pane windows can be up to 50% more energy efficient than traditional windows. Why not combine this with a smart technology upgrade and have smart lighting and a smart thermostat installed. Buyers will be doubly impressed by a smart home that is also energy efficient.

3. A minor kitchen renovation

A kitchen remodel is probably the most expensive renovation you can make in a home. But who says you have to go all the way? A minor kitchen renovation can look just as good and give an ROI of about 81%. This can be done one bit at a time as your budget allows. A minor kitchen remodel involves replacing cabinet doors and drawer fronts and refacing the existing cabinet base. Then throw in new hardware, a countertop, and a sink to give it a new modern look. By contrast, a full remodel will only get you a return of 59%.

4. A minor bathroom renovation

As in 2017, modernized bathrooms are still all the rage. Current style trends are for clean lines with rustic finishes. For color schemes, beige is currently out with light grays being the most popular choice now.

Like kitchens, bathroom remodels are among the costliest upgrades to make. But also, like kitchens, you have a better chance of getting away with a higher ROI by doing a minor renovation. For example, replace the tub with a modernized design and add a tile surround. To get the best return it’s better to stick with low cost to mid-range materials. It’s very easy to go over budget with this so keep a handle on things and you can see a Roi of 70%.

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Essential Considerations Before Buying an Investment Property

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First-time real estate investors generally find the search and process for sourcing an income-producing property overwhelming. Real Estate investing is not as straightforward as many may think. Needless to say, properties, when exchanged between buyer and seller, don’t immediately start performing or appreciating in value, if that were the case everyone would be an expert. If not well thought out, losses and diminishing returns can be a harsh reality. To avoid a money pit investors should be cautious before proceeding.

There is no ‘one size fits all’ approach that works, and property investing varies on a case-to-case basis. At the same time, there are some basic principals which one should consider before proceeding. Here are ten essential considerations to ponder.

1. Opportunities for employment

Locations that are popular due to job opportunities with population growth are popular choices. That in tandem increases demand as more people are looking for a home. Often migration follows if a large corporation establishes a presence in the area. Off-campus housing for college students is another viable option in educational hubs as there is a steady flow of students looking for a home.

2. Location is the mantra

The better the location, the more steady flow of renters. Connectivity, availability of public transportation, proximity to universities and colleges, business centers, restaurants, shopping, hospitals and other conveniences add up to the location’s appeal.

3. Rental rates

In addition to capital appreciation, monthly income earned through a rent roll is key to owning a profitable property. The average rental rates in the area will determine how much you could potentially charge. Therefore, do a thorough review of the rental comps and decide a price that is competitive yet covers your monthly running costs. If the amount is cash flow neutral or positive, your one step closer.

4. Safety is a priority

Security is a top priority and drastically impact the desirability of the property. Research crime rates in the neighborhood past and current. Keep in mind history is not allows a good representation of the future potential.  Residents and local city council websites can be a great resource to explore.

5. Basic amenities

Renters choose neighborhoods with conveniences that cater to their day-to-day requirements. Attractions like movie theatres, parks, shops, gyms, and recreation areas can be a big attraction. Condominium apartments are the most straightforward investment properties for beginners. Condos are easier to purchase and maintain and are often located near desirable amenities. When owning a condo you also do not have to worry about water, power and other routine maintenance issues as they a dealt with by the buildings board and property management company.

6. Educational institutions

For many renters with children, the choice of the location also depends on educational institutions for their children. For investors, it makes sense to keep an eye out for schools and colleges in the neighborhood so that your property can appeal to a boarder audience. It can also greatly enhances the prospects of capital appreciation.

7. Development in focus

Development plans for the area might negatively or positively impact the rental potential and property valuation. Therefore, perform extensive research to find out about ongoing and future developments which may be planned for the area. If a neighborhood is in the early stages of development, that could be an opportune time to capture a share but keep in mind new neighborhoods are often riskier than their established counterparts.

8. Availability of inventory

In addition to all the above, your investment decision should also consider the supply and demand of the particular area. If a location is slated to get a massive influx of rental units in the near term, the chances are your vacancy rate could be higher and rental yield lower. Properties in such places can take longer than usual to rent and generate returns.

9. Property tax

It is essential to know the property taxes and all applicable monthly charges when buying and maintaining a property prior to investing as they directly impact your profitability. Initially, you are required to pay closing costs, but there are always monthly expenses to maintain a property. You need to keep your monthly expenses under control to try and make your investment profitable.

10. Get an insurance cover

It is one of the most critical yet most ignored aspects of real estate investment. Homeowners insurance is a cost to cover unforeseen risks. Most people frown when having to pay for insurance. However, everyone understands that the price of fixing a property damaged due to any reason is much higher than the insurance costs. It is required to make insurance a necessary element of buying and managing a property.

When all the above factors are considered, narrow down the search to properties with good projected cash flow and potential for appreciation and zero-in the best one. Seeking representation from a seasoned real estate agent would provide you with helpful insight and a better understanding of a properties potential.

History shows buying a property is the foundation for building wealth and is still one of the most significant investments by retail and institutional investors. These simple points go a long way in protecting your wealth and giving future returns which can set you for your retirement and provide for the next generation too.

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