Choosing a Market- Philadelphia, PA v Rochester, NY

Starting Out
5yFollow

Choosing a Market- Philadelphia, PA v Rochester, NY

Casey McMahon
Member since 2019 路 4 posts 路 3 votes

I am finally in the place where I am ready to start investing in real estate! I have been analyzing deals for both Philadelphia, PA (where I live) and Rochester, NY (where my boyfriend lived pre-covid, and owns a house). I was wondering if anyone had any insights, pro, cons, etc. about either market that may help determine which market I pursue. 

More specifically: I am looking to start investing in single-family or small multi-family rentals as a way to build a passive income.  I do not yet own any property and this investment property will be my first purchase. 

Thank you for any and all thoughts and suggestions!

1Reply
72 views

Most Popular Reply

Mike Chevalier
Rochester, NY 路 Member since 2017 路 23 posts 路 17 votes
5y

Hi Casey, I'm an investor here in Rochester. Some of the considerations, or things that came to mind would be:

Property Management - you would need a PM if you were to purchase in Rochester, this would be an additional expense. You could self-manage in Phillie, but would need to ask yourself if that aligns with your goals/vision.

Tenant-Landlord Laws - NY is a very tenant friendly state, due in part to laws meant for NYC being applied state-wide. Evictions, etc can take a very long time and be expensive. I'm not familiar with these laws for PA, so can't comment.

Market/Neighborhoods - the market is hot in Rochester right now, especially for desirable neighborhoods. You might be able to get a "deal" on paper, but if it's in the wrong neighborhood it could go the other way pretty quickly. This seems to be the case anywhere, but something to be aware of - make sure you know what kind of tenants are attracted to the area you buy in.

Good luck with your first purchase! Let me know if you have any questions on Rochester, I might be able to help.

3Reply
See this reply in the discussion

10 Replies

Jump to latestLatest
  • Mike Chevalier
    Rochester, NY 路 Member since 2017 路 23 posts 路 17 votes
    5y

    Hi Casey, I'm an investor here in Rochester. Some of the considerations, or things that came to mind would be:

    Property Management - you would need a PM if you were to purchase in Rochester, this would be an additional expense. You could self-manage in Phillie, but would need to ask yourself if that aligns with your goals/vision.

    Tenant-Landlord Laws - NY is a very tenant friendly state, due in part to laws meant for NYC being applied state-wide. Evictions, etc can take a very long time and be expensive. I'm not familiar with these laws for PA, so can't comment.

    Market/Neighborhoods - the market is hot in Rochester right now, especially for desirable neighborhoods. You might be able to get a "deal" on paper, but if it's in the wrong neighborhood it could go the other way pretty quickly. This seems to be the case anywhere, but something to be aware of - make sure you know what kind of tenants are attracted to the area you buy in.

    Good luck with your first purchase! Let me know if you have any questions on Rochester, I might be able to help.

    3Reply
  • Shane W. Chapin
    Specialist 路 Jacksonville, FL 路 Member since 2016 路 93 posts 路 57 votes
    5y

    @Casey McMahon Congratulations on taking the first step! I live in Rochester and would be more than happy to any any questions you have or put you in touch with the right people up here. Oh, and...Go Birds! 馃

    0Reply
  • Casey McMahon
    OP
    Member since 2019 路 4 posts 路 3 votes
    5y

    @Mike Chevalier Thank you so much for your insight!

    I am minimally handy myself, so, unfortunately, I have already started to plan on that additional expense in both locations.

    Philly is also a block by block city, so I have been working on accounting for that while crunching numbers. Obviously, easier said than done when on my couch, I plan to do some driving around Rochester (on a hopefully minimally snowy weekend).

    I really appreciate the insight into concerns about Tenant Landlord Laws! I鈥檝e started looking into both cities to help determine if one is significantly different.

    1Reply
  • Louise Cornell
    Wholesaler 路 Philadelphia 路 Member since 2020 路 45 posts 路 72 votes
    5y

    Hi @Casey McMahon, I saw you received feedback from some Rochester folks so I figured I'd chime in for Philly. 

    I am an agent in the area, I only sell investment properties, and I work with many first time investors. The worst part for new investors in an area like Philly is that the market moves fast, especially right now. There isn't a ton of time to analyze a deal because if it's a good one, it'll sell fast. This can be stressful for a first-time investor going against a seasoned investor who sees a zipcode and buys within a few hours of it being sent to them. 

    Looking for a single or multi-family property is a wide range. Narrowing down what you really want will help determine what market and specific pockets of that market you're interested in. Are you looking for a cash-flowing rental or a flip? Price range, level of rehab, A, B, or C neighborhood, appreciation? I would start by figuring out what matters most to you and then make a decision based on your answers. 

    Happy to delve into specifics on neighborhoods once you narrow down your search or answer any other questions you have. 

    Best of luck,

    Louise

    2Reply
  • Jonathan GreeneBusiness Member
    Real Estate Consultant 路 Madison, NJ 路 Member since 2016 路 6k+ posts 路 7k+ votes
    5y

    To win in Philly, you are already on track by knowing it is block by block and an error there could be long-term gain wasted. You have to work with a Philly expert who knows which areas are swinging up and which are swinging down. We do a Philly REI call every THU at 8 PM and you can find it in Events as Zen and the Art of Real Estate Investing, and we do block by block analysis and neighborhood understanding. For Philly, I use CityData as an overlay to see what each area trend looks like. You can be in adjacent neighborhood sections and have one with a median income of 12k and then the one next door 85k.

    [email protected]Podcast Guest on Show BiggerPockets Daily 667: 5 Amazing Benefits Multifamily Investments Offer (That Single Family Homes Don鈥檛) by Gino Barbaro
    Zen and the Art of Real Estate Investing59 Reviews
    WebsiteView Page
    1Reply
  • Casey McMahon
    OP
    Member since 2019 路 4 posts 路 3 votes
    5y

    @Louise Cornell Thank you for an honest Philly perspective! That really is what I had assumed- my boyfriend keeps reminding me I can't compete with Berkshire Hathaway, which is why I started looking into Rochester. 

    I am looking for a cash flowing long term buy and hold rental property. I am looking to start with about $200/month cash flow and about 6-7% CoC ROI. I hope to invest in B to C+ neighborhoods (in Philly, especially I am priced out of A and most B markets). Depending on the neighborhood, I am looking to spend around 250-300k. In Rochester, I'd be looking to spend closer to 150k on a property.

    0Reply
  • Casey McMahon
    OP
    Member since 2019 路 4 posts 路 3 votes
    5y

    @Jonathan Greene Interesting! Thanks for the post; I'll see you then!

    1Reply
  • Louise Cornell
    Wholesaler 路 Philadelphia 路 Member since 2020 路 45 posts 路 72 votes
    5y

    @Casey McMahon I'll send you a PM with some neighborhoods that would be good for you to look into! 

    0Reply
  • Martin Grizzanti
    Investor 路 Rochester, NY 路 Member since 2015 路 499 posts 路 169 votes
    5y

    I invest in Rochester and I may be able to help

    0Reply
  • Seth Foltz
    Real Estate Agent 路 Rochester, NY. 路 Member since 2019 路 25 posts 路 14 votes
    5y

    Everyone in here is giving good information!

    Biggest part is the due-diligence on finding a good investment.

    Having a team in the area is major too. PMs, Agents, Insurance, Contractors, Lenders, ETC.

    Analyzing neighborhoods is huge too. You will find "hot spots" where things are up and coming.

    Go get it and if you need help, you have the resources to find it! :)

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free