Single family or multifamily in Albany, NY

General Real Estate Investing
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Single family or multifamily in Albany, NY

Steve Hoghe
Real Estate Appraiser · Santa Monica, CA · Member since 2015 · 15 posts · 4 votes

Hello Albany residents, I'm looking for a little local insight. I am from Delmar originally, now living in California, but looking to invest in Albany given that I cannot afford to out here and still have many contacts in the area. I am currently looking in the Pine Hills area, and am debating on going the multi or SFH route for buy and hold. After some quick searching, there seem to be some multis and SFH that meet the 1% rule.

My question is, how strong is the demand for SFH rentals in the area? It seems to me that renting a 3BR SHF at 1400/month doesn't make sense if you can just purchase a 140k house for 5k down and ~900/month (mortgage plus mortgage insurance using a FHA loan. Obviously for recent grads living 3 heads to a place they are not going to purchase a house, so I guess that is part two of the question - does the area trend more to single grads or young families with kids (who would actually consider purchasing)?

On a side note, I will be in the area in mid November and plan on viewing some properties. Would love to meet any local investors or other people in the business while I'm back.

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Paul Mendel
Albany, NY · Member since 2015 · 46 posts · 25 votes
10y

Pine hills can be hit or miss, Its mostly older housing stock, HEAVY college area, but also turning into a little bit "rougher" in other areas. 

General rule of thumb is single familys are not great on cash flow, one empty month and your whole year could be at a loss where duplexs help with that. 

Managing a house in the college area from afar plan on parties and police calls.

Im very local and have a few houses in that area myself, feel free to reach out.

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  • Paul Mendel
    Albany, NY · Member since 2015 · 46 posts · 25 votes
    10y

    Pine hills can be hit or miss, Its mostly older housing stock, HEAVY college area, but also turning into a little bit "rougher" in other areas. 

    General rule of thumb is single familys are not great on cash flow, one empty month and your whole year could be at a loss where duplexs help with that. 

    Managing a house in the college area from afar plan on parties and police calls.

    Im very local and have a few houses in that area myself, feel free to reach out.

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  • Muna A.Pro Member
    Cambridge, MA · Member since 2016 · 5 posts · 8 votes
    10y

    @Steve Hoghe: I would be interested in finding out whether you made the trip to Albany and what you learned.

    A friend of mine lived in various Pine Hills 2-families for a long time.His landlord offered to sell him the property he was last in and he and I looked to partner on it together.We ended up deciding against the deal due to high taxes, lack of appreciation, and a lot of deferred maintenance (which we felt was a ticking time bomb). We also looked at other properties and found this to be generally true of the multiplexes in the area.

    @Paul Mendel, @Ryan Vienneau, @Adam Gelman: Do you know if there's a market for updated 3/2 SFH rentals zoned for good school districts (e.g., Guilderland)?

    Thanks!

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  • Paul Mendel
    Albany, NY · Member since 2015 · 46 posts · 25 votes
    10y

    There is/aways will be somewhat of a demand for single family rentals, This is due to lack of inventory, Because most educated investors know that single family investing tends to carry to much risk with limited reward unless the markets appreciating like crazy. If you think Albany's taxes are bad wait till you see guilderlands, a 3/2 sfh in North colonie would likely rent in the 1800 range, but you have to pay 250k for a decent one.. the numbers rarely work unless your getting killer deals on them. Remember SFH are sold at Market value not a Return on Investment or Income calculation. I'm not saying money cant be made, but its just not "smart" investing "typically".

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  • Ryan VienneauBusiness Member
    Investor · Stillwater, NY · Member since 2015 · 149 posts · 121 votes
    10y

    Personally if I were going to choose an area of the country to invest in that's not in my own backyard, NY would probably be the absolute last place to do so due to the taxes and weather, especially with SFR's. Forget the 2% rule, you'll be lucky to cash flow a SFR at 3% due to the taxes. Everyone on BP that touts the 50% rule and 2% rule doesn't live in NY where taxes can easily be 5-10% of the total acquisition value of the property each year. Example, I just went to look at a gorgeous 4 BR 2200 sf house in a really good neighborhood in Schenectady near the college, it needs some work but nothing major, yet the price has dropped to $45k, no one will buy it, because the taxes are $8200!!!!!! So, suppose you could get $1600/mo, almost 50% is eaten by taxes before you even begin to pay mortgage, maintenance, etc. No flipper, investor, or homeowner can make that math work, so it's going to rot vacant.

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