Looking to buy properties in Binghamton, NY
Rochester, NY · Member since 2017 · 58 posts · 10 votes
Hello Everyone,
I'm looking to purchase a rental property in the Johnson City / Binghamton area to use as a student rental. If you are looking to sell or can offer any advice/leads please let me know.
Thanks,
Will
Hi Will,
I'm surprised no one has jumped in here yet! I have owned a 2-unit rental property in Johnson City for almost 15 years. It is a great area to buy and hold rentals. Now, having recently moved away, I am selling the house. Here are a few quick things I can tell you:
- The Binghamton area has great investment potential with buy-and-hold rentals. Don't expect a lot of appreciation, but with the right purchase, the monthy income is good.
- Be careful of where you buy. This is probably true for all regions, but neighborhoods change quickly. If you're not familiar with them, I'd spend some time visiting and familiarizing yourself with them. Also, I like to follow the local news with a map by my side, so I can get a better handle on what's happening where.
- Finding management in the Binghamton area is hard. Finding good management is harder. This is one reason (but not the only reason) I am selling.
- Know what type of renter you are targetting and plan your purchase location, desired amenities, and marketing strategies accordingly. You said you are looking for student rentals. I can't list all the student neighborhoods here, but generally you're looking at Binghamton and Johnson City. You mentioned those areas, so I assume you know that much. Just be careful of people marketing to out-of-town investors. If you'd like to discuss more, feel free to PM me or ask your agent.
- Speaking of agents, do you have one? I am currently working with Stephanie Jacobson - she is great and very motivated! She is also investor-friendly and an investor herself. Other than "investment property" I don't know if she has a particular specialty. There is another agent in the area that is known for specializing in student rentals, but I was never able to get ahold of him.
- For student rentals, you might also want to look into the local laws on what constitutes a "family unit" and laws regarding absentee ownership/management. I don't rent to students, so I can't help with that, but I do know that those two topics were big issues several years ago. There used to be a lot of tension between local residents and students, and it kind of came to a head, and the city cracked down on them. It might not be an issue anymore, but I don't know. My feeling is that for the last several years now, the region has been warming up to students. I think it has to do with BU and the city working together to integrate more. It is starting to blend into a college town and will be very interesting to see how it all develops, particularly as BU continues to expand.
- Don't just focus on Binghamton University students. I know many people who attended Broome Community College and lived off campus. You won't find much student housing near their campus, but no matter where you buy, you might want to market to them as well.
Hi Will,
I'm surprised no one has jumped in here yet! I have owned a 2-unit rental property in Johnson City for almost 15 years. It is a great area to buy and hold rentals. Now, having recently moved away, I am selling the house. Here are a few quick things I can tell you:
- The Binghamton area has great investment potential with buy-and-hold rentals. Don't expect a lot of appreciation, but with the right purchase, the monthy income is good.
- Be careful of where you buy. This is probably true for all regions, but neighborhoods change quickly. If you're not familiar with them, I'd spend some time visiting and familiarizing yourself with them. Also, I like to follow the local news with a map by my side, so I can get a better handle on what's happening where.
- Finding management in the Binghamton area is hard. Finding good management is harder. This is one reason (but not the only reason) I am selling.
- Know what type of renter you are targetting and plan your purchase location, desired amenities, and marketing strategies accordingly. You said you are looking for student rentals. I can't list all the student neighborhoods here, but generally you're looking at Binghamton and Johnson City. You mentioned those areas, so I assume you know that much. Just be careful of people marketing to out-of-town investors. If you'd like to discuss more, feel free to PM me or ask your agent.
- Speaking of agents, do you have one? I am currently working with Stephanie Jacobson - she is great and very motivated! She is also investor-friendly and an investor herself. Other than "investment property" I don't know if she has a particular specialty. There is another agent in the area that is known for specializing in student rentals, but I was never able to get ahold of him.
- For student rentals, you might also want to look into the local laws on what constitutes a "family unit" and laws regarding absentee ownership/management. I don't rent to students, so I can't help with that, but I do know that those two topics were big issues several years ago. There used to be a lot of tension between local residents and students, and it kind of came to a head, and the city cracked down on them. It might not be an issue anymore, but I don't know. My feeling is that for the last several years now, the region has been warming up to students. I think it has to do with BU and the city working together to integrate more. It is starting to blend into a college town and will be very interesting to see how it all develops, particularly as BU continues to expand.
- Don't just focus on Binghamton University students. I know many people who attended Broome Community College and lived off campus. You won't find much student housing near their campus, but no matter where you buy, you might want to market to them as well.
Thanks for me mention @Paul McCue! Will and I have been messaging back and forth. As always, your advice is spot on!
@Paul McCue Thanks for the info Paul. Glad you recommend @Stephanie Jacobson, she's been great with helping me so far!
Quality property management seems to be the hardest thing to find so far. I'm about to start running some posts on a few different websites like craigslist to see if I can find someone who seems motivated and reliable. Out of all the PM companies I reached out to, only 1 responded back and I wasn't impressed.
Thank you for bringing up that I should be checking local laws - I havn't done this at all yet. I went to a SUNY school as well and the small, upstate town had some strange housing laws which limited how many and who could be on the lease. (If too many girls lived in the same house it was considered a brothel....What year was that law created!?)
@Paul McCue What type of properties did you own - Lower end value / Higher end Value? You say that you're selling because you're moving away, could you elaborate on how and why you came to this decision? As someone looking to buy long-distance in the area, I don't like hearing that someone seasoned with the local area for the past 15 years doesn't want to manage their property long distance.
Thanks Everyone,
-Will
@Will Stahl,
Funny, I don't remember where, but I've heard of a brothel law like that before too!
I don't mean to dissuade you from investing in the Binghamton area. As I said, it's a great place to own rental property. I own what I consider to be an average priced property. It is in very good condition, and I have high standards when it comes to maintaining it. I have had great tenants for the last several years, and they have helped me take good care of the property and made managing it from a distance easier. The reasons I am selling come down to these:
1) Management
2) Money
3) Desire
Management:
As we seem to agree, finding good management in the area is difficult. Because I have high standards, I haven't trusted the few PMs that I've found. I have strongly considered starting my own management company in the area. Ironically, I feel more strongly about it now that I'm gone and searching for management, but since I've now moved that makes the idea of starting a company in the area much harder to accomplish. Managing from a distance without a property management company (and even without any paid help at all!) is not impossible. I have done it for almost 2 years. I think it helps to have good tenants who take care of the property AND are willing to report to you when something needs attention. With that alone, you can do it. However, I also believe it helps to know people in the area that you can trust - a handyman or contractor(s) would be great, but not necessarily required. The problems I see are 1) reliable information about the condition of your property, and 2) speedy attention to whatever needs to be addressed. Tenants, even when they mean well, are not always reliable sources of information, and situations can become emotional when something is affecting their peace and enjoyment at home. You will also end up negotiating/working with them on how to solve a problem that they often feel is only your responsibility. The most important thing, though, is to have someone who can get eyes on the property/problem on short notice. Even if they're not a handy person, that's ok, as long as you can communicate well with them. Personally, I have relied on tenants with varying degrees of success. At other times I have had friends help with this. Some were handy; some were not. Sometimes it's a favor; sometimes I've paid them.
Access to the property is always an issue though, unless of course it's a tenant. But even then, it can be tricky when you're dealing with more than one unit. Assuming you're not working with a professional PM, I strongly recommend giving the person you choose a copy of all of your keys. I've only recently had a friend hold keys, and we kind of fell into that arrangement, but it's helped tremendously! I have always had NYSEG (utility company) hold a key to access the meters in the basement, even when I lived in there. And for a short time, I had a large plumbing company hold a key as well (not all keys, just the most essential one). It's not cheap to use a professional person or company as your primary source of information, especially, for instance, a large plumbing company - I can tell you from experience, and I don't recommend it! haha But it is very handy to let them hold a key when it comes to scheduling a time for them to get in and do work. Coordinating schedules when your tenants are the only key-holders is a huge pain!
Anyway, to sum up, even though I started to iron out the details, my decision came down to management quality and management cost.
Money (or rather time + money):
Managing from a distance, whether you use an established company or not, costs more than self-managing locally. It's a cost that most people factor in up front (or should!), but I never had to before. Although I found a way to manage the property and still make a profit, the margin was thinner. Keep in mind, I own only one property! I decided that my choices were either buy more properties to increase my over all profit and spread out my overhead and management costs, or sell the one I have.
On top of that, I have owned the house for 15 years. I have a good amount of equity in it. I bought the house 100% financed, so in a sense, I have an infinite return. But once I factor in the amount of equity I've built up both through loan payments and appreciation (yes, appreciation does exist in that area, just slowly in my opinion, and some of it was forced), my return is decent, but I can do better elsewhere. And the longer I wait, the lower my return.
Desire:
In the end, I chose to do something different. My life is different now than it used to be. I work full time and have a family. Since I haven't trusted my property to an established company that could handle everything, it has required more time and effort on my part. I want to spend less time on my investments right now, not more. Or at least less time per dollar.
I love buy and hold rentals. And to reiterate (again!), Binghamton is a good place for that. Right now though, I have other ideas of where my real estate career will take me (lending, etc - more passive roles like that or managing short term projects like flipping). I am almost certain that I will get back into rentals in the future, and over the years I have worked hard to create systems to simplify, strengthen, and legitimize my future rental business. But that's just not where I'm going right now. Also, while there is a good chance that I will eventually buy more rentals in the Binghamton area, with the growth trajectory I have mapped out and my ideas of how I want to structure, it will involve buying a lot more units and utilizing paid management. If, at that time, I still can't find any management in the area that is up to my standard, then I just might start a company. :-)
@Paul McCue Thanks for the thought out response. I still plan on moving forward. I plan on heading to Binghamton this weekend (about a 3 hour drive) and checking out a few properties and some members of my team. The pros out way the cons for me and being a long distance investor is something I embrace and look forward to learning all about.
If you ever start a PM company be sure to let me know! haha