What Advice Would Abraham Sanieoff Give to Someone Interested in Investing in Real Estate
It should be noted that real estate in USA, both among beginners and experienced investors, has always been in demand and remains so. Investors have seen particularly good capitalization growth over the past year.
According to Abraham Sanieoff, real estate in the USA is perceived as the most reliable form of investment. Accordingly, the demand for real estate during the period of economic recovery will remain high, despite objective factors that increase the cost of construction. According to Abraham Sanieoff, residential real estate in cities of regional significance will continue to look like an adequate form of investment in the long term.
Abraham Sanieoff thinks that due to the current situation in the real estate market, when prices have already shown a significant increase, opinions differ on the future. In terms of the economic growth potential of the USA and the growth of real wages of the population, the cost of a square meter in the USA may grow by another 4–8% during 2022.
“However, already now investors are actively looking not at the housing stock, but commercial or suburban real estate. As a rule, such options offer higher returns than residential real estate and also retain the potential for price growth per square meter.
For example, you can become an investor already operating a hotel and restaurant complex near Manhattan at 8.5% per annum in foreign currency or invest in country cottages at an estimated 12–16% per annum in 2–3 years,” Abraham Sanieoff shared. So, let’s now know the advice that would Abraham Sanieoff give to somebody interested in investing in real estate this year.
Advice For Real Estate Investors from Abraham Sanieoff
Here are a few pieces of intended advice from Abraham Sanieoff on real estate investment.
Access Commercial Real Estate
An option for experienced investors with a trained eye who immediately see objects that will be in demand. This investment brings more profit when renting than when reselling.
Land Allotments by The Landlord
The main advantage is that land is the cheapest type of real estate today. The land is easier and faster to register as a property in NYC (New York City), and it doesn’t need additional expenses for repairs or utilities. But newcomers often get affected by acquiring unprofitable land holdings. The most liquid for today are plots for construction, and agricultural land is better suited for long-term investments.
Abraham Sanieoff calls this method “a situational type of investment for megacities.” The level of income depends on the location of the parking lot — you are willing to rent a place in a busy area, where parking a car in the yard is often unrealistic.
NOTE: Abraham Sanieoff claims that it is important to take into account such a simple law: the purchase of real estate without further leasing or resale data turns this profitable asset into a liability.
Now the moment for professionals has come in the real estate market. Prices have already risen, and it is more difficult for an ordinary person to find a good object with growth potential. Therefore, in the current market, at least, it is worth finding a consultant for a particular object with an independent assessment of the situation.
An alternative option is to consider a profitable real estate segment, where the management company takes care of all costs and operating activities by consulting a lawyer, and the investor receives a cash flow from investments in subsequent years.
One of the most important recommendations for this kind of investment is a clear understanding and claiming of how long the investment is made. There is either a purchase option for long-term ownership and further lease of the object or a speculative option when the goal is to fix profit on the operation within a year or two.
For speculative real estate transactions filed, it is necessary to look for such objects for which it will be easy to find a buyer at a higher price if the general market situation shows an increase in the cost per square meter.
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