I live in Long Island, New York. I've been analyzing properties in Nassau/Suffolk/Queens and I've come to an obvious realization - the property taxes are ridiculously high. Any buy and rent cash margins are slim, as well as any appreciation (Suffolk County has or had at one point the highest number of foreclosures of any county in New York State). If you do a quick search on zillow, trulia, etc. the majority of single-family homes listed under $175,000 are in foreclosure. Property taxes range from 7-$15,000 annually in the better neighborhoods. Yikes. And then you have the potential rehab/repair costs.
Foreclosures do certainly represent opportunity and they're generally sold "as is" and in cash (for $100,000 and upwards). There is an auction next week that I will attend. If any Long Island foreclosure opportunists are out there I would love to connect with you and help out in any way I can.
As for buying single unit apartments and renting them, the property taxes again eat away on any monthly cash flow. The positive deals that I have analyzed generally have an cash ROI of just over $100/month. In addition, because the Long Island market has been generally stagnant since the crash, capital appreciation is also iffy - so equity remains stagnant. Correct me if my thinking is wrong here.
Anyways, aside from the pessimism - an interesting investing opportunity would be the beach cottages along the north and south forks. I've come across several on craigslist that are fairly cheap (around a 100,000 or less) that would serve as great summer rentals. The rental income from the summer months (May-August) alone would cover the annual costs, and the equity on the Forks has more potential of increasing then anywhere else on the Island.
Open to comments, thoughts, suggestions. Thanks for taking the time out to read this.
I currently live in Nassau County and I completely agree with you on property taxes eating away at returns. I'm curious to know if and how people have had success with investing in Long Island. If you venture towards Queens, the property taxes are almost half, but I find many homes are almost twice the cost. In my opinion, I think you have to look at the numbers and see what return is profitable for your situation. I know we all are looking for the dream investment that nets us a huge profit, but we have to start somewhere. Best of luck in NY! I'm always excited to see people from NY
I agree with both of you on the taxes. Taxes here are ridiculous. This year I bought my first investment property in Centereach and luckily my tenants cover my taxes and mortgage payments so my jobs paycheck is used for other things (cc payments, food etc etc)
I think that the best move to invest anywhere in NY is to look at multifamily units in BK or queens. Some multifamily units have a basement so you could rent out the units and live in the basement if you don't mind.
I've done numbers for example lets say you buy a 5 unit building for 800k at 4% with 8k taxes a year and 2k a year in homeowners insurance. Your montly payment on that building would be 4652. And if you rent each unit at 1200 you get 6000 per month.
Obviously you need to put at least 300 a month on the side for maintenance but you still get a decent return. Also I am assuming no PMI, but with PMI , add 200 a month to your mortgage payment . You'd still be victorious ;)
Xavier - interesting idea. I am looking in the towns where taxes are lower on the Island (say Hicksville). I would be really interested in meeting and talking more for sure - please let me know your availability.