Published by Forbes.com | January 20, 2025
Primary markets tend to move much faster, while transactions in secondary and tertiary typically take more time.
Investing in primary real estate markets like New York City comes with its own set of challenges and rewards. After being in the industry for more than 25 years, I’ve found that there are opportunities both for new investors and seasoned veterans, especially if you have the Insider’s Edge. Gathering information and following the right strategies can help you gain an advantage, even in highly competitive markets.
If you’re looking at a primary market, many aspects of the real estate industry will depend on the people in your network, as individuals can share knowledge and information with you regarding properties. For this reason, it’s all the more important to have your team in place and ready to move forward. You’ll find primary markets tend to move much faster, while transactions in secondary and tertiary typically take more time.
Consider these guidelines as you invest in real estate in primary markets:
Understand the Market Dynamics
There are certain characteristics that set primary markets apart from others. Primary markets refer to a geographic area that has a high population density, such as large metropolitan areas. They are economic hubs and tend to have a diverse range of industries, along with consistent demand and higher prices. Some examples of primary markets in the U.S. include New York City, Los Angeles, Chicago, and Boston. Secondary and tertiary markets will have less population density, and the demand can fluctuate.
Primary markets also have a wide variety of property types, such as multi-family, office, retail, development, and industrial. They may have more stringent rent regulations and zoning laws that you’ll want to be aware of. There could be opportunities for value-add properties, which allow for improvements that increase property value. Some investors in primary markets will focus on cash-flowing assets that provide consistent income in a stable neighborhood.
Develop a Niche
In a complex market, specialization can be a key to success. You might identify a niche that aligns with your skills, interests, and financial goals. That could include renovating distressed multi-family properties or acquiring stabilized assets for steady cash flow. Taking a focused approach over time could allow you to build expertise and establish a competitive edge.
You might decide to tailor your strategy to meet tenant needs and create a better rental experience. If done well, the result could be a win-win situation, in which both the tenants and investors benefit.
In competitive markets, you might be able to find a deal that involves solving a problem. Distressed properties, motivated sellers, or inefficiently managed portfolios could offer chances to create value.
