Guest post by Bernard Klein – Founder, Blooming Sky
The spring house hunting season is kicking into full gear. With the cold weather finally in the rear-view mirror, weekends are bustling with activity. Open houses will be swarmed with buyers ready to shell out their hard earned money creating a frenzy of activity that is sure to leave many outbid buyers disappointed and confused about the home buying process. So how do you beat the crowds and find places that match your need for value and utility? You must go where the masses are not.
In plain English: Instead of looking in the established neighborhoods, seek out the up and coming neighborhoods. It will be an opportunity to find value and buy into a neighborhood that is continuing to rapidly accelerate in price. You will have the opportunity to reap the rewards of a great investment, while at the same time avoiding some of the madness you might face in the more established neighborhoods.
So what is an established neighborhood anyways? First of all, it’s probably a neighborhood filled with co-ops that are multiple decades old. Let’s take Brooklyn for example. You have neighborhoods like Park Slope and Carroll Gardens. While Brooklyn as a borough has gotten more popular, which has driven up prices all around, neighborhoods like the aforementioned haven’t really changed much in the past ten years. Is that what you want? A neighborhood that hasn’t changed? That sounds a touch boring.
On the flip side, you have neighborhoods like Bushwick, Bed-Stuy, Crown Heights and Prospect Lefferts Gardens which are transforming as you read this. They’re changing with new development, new residents, new restaurants, new coffee shops and new boutiques on every corner. While still maintaining their rich heritage, these neighborhoods are attracting new people with new ideas, undergoing transformations that will continue to attract additional investments. Now imagine buying into that!
So how do you spot an up and coming area? The first thing I always recommend is trekking out to a neighborhood you’re not familiar with. Check out Google Maps or Yelp on your smartphone and type in “coffee shop.” Look for the most highly rated shop in the area, and take the coffee for a spin. Does the shop give off a good vibe and serve good coffee and pastries? If yes, then great. Ask the barista which restaurants s/he recommends in the neighborhood. Listen closely! You now have lunch plans, armed with a list of choices. Hopefully lunch was good, and you’re now excited about seeing what else is in the neighborhood. Walk around within a five block radius and see what’s going on.
What should you be looking for? More restaurants. More coffee shops. Trendy, experimental retail. Most importantly, look for construction. Are people gutting town homes? Are new rental and condo developments coming up? Great, then you’ve discovered an up and coming area. Do you see none of this? Okay, well hopefully coffee and lunch were decent.
Up and coming areas definitely attract a certain type of crowd. They also attract people who see the longterm potential of buying into something that is rapidly changing. This usually makes for an opportunistic investment. However, investing in change isn’t for the faint of heart. So which part of New York City do you plan on checking out this weekend?
Bernard Klein is the founder of Blooming Sky (www.bloomingsky.com). He has invested in real estate across Manhattan and Brooklyn and is currently helping his clients do the same, whether they are seasoned investors or first time home buyers.