UTICA, NY look into it, or look away???

8 Replies

Hi guys, i am an investor in the Westchester, NY area where I have been quite successful. I was just presented a deal in UTICA, NY a multi family property with excellent cash flow and 7.5% cap rate. Those i ask for advice from told me not to invest in upstate Ny. The numbers just add up and make sense and i can't say no without a valid reason. Can someone (with experience) please enlighten me on the real estate market in Utica, Ny?? * is the value appreciating or depreciating?? * is there substantial population?? * is there any particular reason or attraction someone would live in Utica I.E. great college, good school, or job opportunity?? * what age group are Renters?? Any and all advice is welcome and appreciated. Thanks in Advance

Upstate NY  (Utica, Syracuse,Rochester,Albany....etc) is not a great place for appreciation. However, that is not to say there aren't pockets or periods where that is not the case.  As for Utica, look into the status  of Nano Utica for any hope of job growth.

Having said that, much of Upstate is characterized by above average cash flow....especially in the aforementioned markets.

thanks Jason for your reply. Does that mean that the price I'm buying it for will probably be the price I'll sell it for?? Will my cao rate stay the same?

I’ve learned that some areas don’t cash flow.

Some areas don’t appreciate.

Some do both. Usually not for long.

In my personal opinion, when a property appreciates to much, it eats up the cash flow. Cap rates get lower, prices don’t.

I invest in an area that probably won’t see much appreciation but cash flows. At the end of the day I need food on the table every month. Appreciation is just like having dessert. It’s all about what your strategy is.

I can buy a place for 75-100k that has a NOI of $1000 a month. That’s a pretty great cap rate. Don’t think the value is going up any time soon though.

@Fraidy Deutsch There are better markets to invest in Upstate than Utica. It seems like you don't know much about the area, you should take a weekend and spend some time there and you'll see why. Downtown is pretty rundown, not very many good paying jobs around, and the area is losing population. If you want to look Upstate and be closer to home, look at the Albany area. More diverse economy, low unemployment, very large student population, decent paying jobs, and a very tight rental market with low vacancy rates. The bad thing compared to the rest of the country is high property taxes, tenant friendly laws, and the winter weather can take a beating on the mostly older housing stock. However high cash flow can still be found if you buy right and factor all that into your numbers.

Thank you all your suggestions are much appreciated. To be more precise about this deal, i literally have to put very little money down since the seller is willing to hold the rest of the money after i go for a bank loan. I can't help but wonder if this is "to good to be true"...

Friday I have to agree with Steve. Take a few long weekends and go up there. Since you live in Westchester I would start with Kingston (which is recently known as Brooklyn North), then Saugerties and woodstock. Then I would swing over to visit the Towns of Catskill and Hudson. Both near each other. Then hit Albany. All of these towns have been showing a stead increase in values. Although I would say that Hudson has become overprices.

I'm 35 minuets from Utica. There is a lot going on there. There is a decent sized downtown revitalization going on. They are probably building a new hospital. So from my limited experience, depending on your goals there are good things going on there. That being said, it all depends on the location. There are several very bad locations there. I have not looked at many properties there, I'm slowly building but would look there. I've looked in Albany and cap rates are low and you have to look very hard to find a deal. I've been told Troy is a good location, haven't had a chance to look yet. Hope that helps a little

Although I do not currently reside in the area I did live there for 30 years and still visit family approximately 8 times a year. In the past I had investment properties in the area and am currently seeking to re-enter the market. Utica is a market that many might shy away from but it would depend on your goals. If you are looking for any sort of appreciation you are looking in the wrong place. That said, because they do not participate in the huge market up swings, they enjoy stable home values in the economic downturns. I have found the cash flow to be above-average. I believe this to be mostly due to the lower than average home prices and the fact that the somewhat depressed area economy keeps some folks out of home ownership and into the rental market. The population has been in decline but at a very slow rate. Some of the population losses have been stabilized by influxes of refugees. For me specifically, I will be focusing on the outskirts of Utica (Whitesboro, New Hartford, etc...) where the schools are much more desirable. The area has some potential for growth due to the new Nano Tech facilities but it remains to be seen if that will all come to fruition.

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