Are you planning to buy a land property in New York, the home to the Statue of Liberty? We are going to help you make the right decision in this guide.
Finding the right property to help you achieve your goal of building your own home that you have worked hard to achieve, can be the most difficult task. You need to consider a lot of factors like location, the safety of the vicinity, cost, and your future livelihood before you make an enormous investment.
We have critically analyzed the benefits and the drawbacks of being a landowner in New York. For instance, you will not have to pay any personal income tax for owning a land in New York. Moreover, The climate of New York state is generally humid continental, hence easy to settle in.
But, there are considerable drawbacks that you need to consider before making up your mind to buy a property. You need to have clarity; why do you want to invest in owning land, and why in New York? These questions need to be answered before making this huge decision. Indeed, land investment is one of the most secured investments in the world, but to make it profitable or beneficial you need to define its purpose.
We have gathered a list of pros and cons of owning land in New York that will allow you to assess your decision before booking an appointment with your broker.
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Owning Land in New York: Pros and Cons
New York, the home of the Yankees and the Giants is known for its diverse background and love for sports. Whether it's baseball, basketball, football, or hockey, New York is home to one of the biggest teams in the world. More than 500 languages are spoken in the state of New York, making it the most linguistically diverse place on the planet.
The state of New York has an economy of around $2 trillion making it the third richest state in the US. It is home to the biggest financial market in the world New York Stock Exchange.
It is a state known for its freedom and opportunities and is no short of talent as it hosts two IVY League schools where thousands of students from across the world come to access quality education.
New York is also nicknamed the “Empire State” as it hosts the Empire State Building in New York City. It is a state known for real estate and development and is a perfect place for your property investment.
The thriving property market in New York has seen property rates rise every year, making it one of the most profitable property markets in the world.
This guide will assist in evaluating the pros and cons of owning land in New York. It will also analyze the crucial factors that need to be considered before investing in owning land in the State of New York.
The state of New York is bordered by Canada and Lake Ontario in the north with a population of more than 20 million. It is situated on the east coast with New York City being the largest city in the state
The state has a huge potential for its land due to many reasons that you can consider before investing for yourself.
Budget plays a critical role when you decide to make an investment. So it is important to realize, what is the purpose of this purchase and how will it meet your greater financial goals.
The state of New York is considered the crown jewel of the east coast. However, the prices of owning land are far cheaper when compared to states like California and Washington according to Business Insider.
Land Investment is a considered cheap investment in New York and a good way to start your investment journey. If you find the right location for your purchase of land, then you can buy low and sell high.
However, if you plan to develop that land and plan to shift your family to it, you will get a better deal in shifting towards a suburb in the state rather than buying it in the bustling city of New York. So it all depends on why you want to make that investment.
Secured and Long Term Investment
Investing in real estate in New York is considered to be one of the most secured investments with low maintenance cost and low fear of theft
The value of the property continues to appreciate over time and landowners can also benefit from their property by leasing them out. According to NYFB, New York is home to more than 200,000 employees in the agriculture sector, hence landowner can lease their land to farmers to earn overtime.
Moreover, property investment can also be a source of creating a retirement income for owners and giving you flexibility in developing it according to your needs or leasing it for a stable monthly income.
You will not have to pay any personal income tax if you decide to own land in New York. Moreover, there are several property tax exemptions that you avail of throughout the state.
Depending on your purpose and background you can avail yourself of certain exemptions. These include but are not limited to the S.Ta.R (School Tax Relief) and the Senior citizens exemptions. Other exemptions are given to people with disabilities, veterans who have served in wars and people with agricultural properties in the state.
This will allow you to maximize your return on your investment on your hard-earned money that could allow you to reach your greater financial goals. Furthermore, the money you save will give you the freedom to develop your property into residential or commercial real estate.
Hence, it allows you to earn a huge upside on the money you save from taxes
However, it's not all rainbows and sunshine in New York, with any sort of investment, they are risks that come with it. You need to understand these drawbacks before you plan to make this huge investment.
These cons are not discussed to discourage you but to make you aware of the considerable factors that you need to understand and weigh in compared to its pros. Furthermore, these cons will help you figure out whether investing in land property in New York serves your best interest.
The real estate market is very competitive in New York. but owning land is still cheaper compared to an apartment or a house, however, this also limits the return on your investment.
The value of your land property will not appreciate as quickly as compared to a furnished house hence, your investment can be stuck for a long period will low returns.
New York has several land use and zoning laws that regulate the use and development of real estate. The land-use zoning is functional zoning, which defines zones according to their function. Therefore, it limits the flexibility for owners to develop or use land according to these restrictions.
Hence, binding owners to comply with these laws can result in fewer returns for an investor. Since each property is zoned for commercial, residential, administrative, or green space, limiting the choices for owners for future developments.
Lack of Liquidity
Buying a land property comes with its own disadvantage and the biggest drawback is its lack of liquidity. It approximately takes around 100 days or more to sell a property from listing to closing in New York depending on its location.
Consequently, suppose if you immediately need cash for an emergency, selling your land is not an option. When you compare to other investment avenues in New York such as the stock market, bonds or CDs which are considered highly liquid.
Factors To Consider Before Owning Land in New York
It is vital that you understand these factors before investing in land ownership in New York. These factors will guide you before you finalize your decision
This is one of the most important factors that you need to consider before making your investment. A good location and a good neighborhood will impact the value of your property in the long run.
Hence, don't only look for ecstatic views but make sure to check out the neighborhood. Moreover, if you plan to develop it make sure it's near to business district, schools, metro, and hospitals.
Inspect Your Land
As mentioned above, they are many risks when one plans to invest in real estate. Therefore it must be of utmost priority to inspect the property for any legal disputes, unpaid mortgage bills, or late tax bills from previous owners. Moreover, validate all property documents, prices, and locations before finalizing the purchase.
You also need to look for any environmental and zonal restrictions that could limit your future development plans.
Size Of The Land
It is important to understand the size of the land that you plan to purchase. Because in the future if you decide to develop it, you would face limitations on the value you can create from the land.
Moreover, some parts of the property like steep slopes won't be usable for development hence, make sure to inspect and check the size of your land to make the right purchase.
About THE AUTHOR
We loved family’s outdoor adventures so much we started a land business just to help others buy their own land. We’ve sold to dozens of people from ATV weekend warriors to camping enthusiasts to retired truck drivers. Our inventory spans five western states. We’ve been trained by experience, land acquisition courses, and hundreds of hours meeting with county assessors and clerks, zoning officials, realtors, and land investors. We’ve answered hundreds of questions from people regarding the buying and use of land.Read More About Brittany Melling