Investing in Albany NY smart or not ??

29 Replies

Albany is not a cyclical market but has always provided solid cash flow due to the amount of local colleges, hospitals, and government jobs.  But if you decide to invest In  cheap properties in D neighborhoods.. that's exactly what you'll get. 

@Kevin Urena I'm a investor in Albany, NY and in my opinion if you can cash flow positive after your operating expenses, debt services, and putting money aside for reserve you'd be buying a good property that being said currently it seems like investors are selling off. They're taking as low of a cap rate possible for their properties to jack up the price of property when they sell it. So when you're selling - looks good based on comparability analysis, but for buyers its to the point of making sure it makes sense for you based on cash flow.

Land bank is cheap - but there's a lot you have to get in line before proposing offers to them for a property.

People always say Albany is a stable market, with the government, schools, universities, etc.... and that appreciation shouldn't be expected. While I think this is a solid point of view, I think there is some room on the upside, but the Capital Region needs to do a better job of branding itself beyond being the state's capital.

We're an hour from the Adirondacks, a couple hours from Boston, NYC, Montreal. Cost of living (and thus cost of hiring, doing business, etc.) here is low compared to cities like those. Regeneron has a major presence here and the nanotech scene has potential, although I haven't been seeing as much growth in this area as I'd like. I'd love to see Albany turn into a tech hub like Austin, Texas.

Could Albany become the Austin of the Northeast, a large tech hub? I think it could. Is it probable, or even likely? No. Our incompetent state government would need to make some major changes and take on some major initiatives.

But... I like to think it could happen. The government has got to do something about people fleeing Upstate. Albany hasn't seen the population decrease that other upstate cities have, but it's not attracting people, either. I see branding Albany as a "tech" city, beyond just a bureaucratic government jungle, as the most realistic solution to this.

Investing is a risk-reward game. Albany is indeed stable for the reasons I mentioned in the first paragraph... government, colleges, etc. But I also see the upside potential, albeit a small one. Not a bad tradeoff in my opinion, minimal risk (relatively) for a potential large reward.

Would love to hear what you guys think about this!

I'm new and trying to get my financial IQ up to par and learning all the main nuances about real estate investing, I was looking at Albany, NY to get me feet wet in.  Currently living in NYC area, so I figured Albany could be an easier market to get into.  I know the area somewhat from my college days.   

@Josh E. I think your absolutely right that’s why I asked because I don’t see ppl running up to Albany at all there is no economic stability besides the schools, and it’s sad that the governor hasn’t addressed this I think what would help the real estate market beside a big tech boost is the legalization of recreational  marijuana up there, give a reason for tourists investors ect to actually visit Albany it will boost the local economy give locals a chance a new business ventures and overall give the area some much needed exposure  

You might want to take a look at some laws that were passed this spring that may drastically change the viability of buy and hold real estate investing upstate.  It's been fast and furious, beginning this April with the "source of income discrimination protections", and now "stayed" evictions of up to one year, all on the landlord's dime:

https://www.timesunion.com/news/article/Sweeping-tenant-protections-for-upstate-signed-13998327.php

@Wesley W. I'm worried that these laws are just the beginning. Frustrating to see, as this is a lose-lose situation for all parties involved... tenants, landlords, and the state economy. Guess the only winners are Cuomo and his bureaucrat buddies, who just won themselves a few more votes

My husband and I are looking to buy and hold in the Cap Region. There's very little to no appreciation but that's ok. I'll hold onto the right property until I'm old and grey as long as it's cash-flowing enough. I'm curious if any current property owners are having trouble with the new laws yet and if eviction has been an ongoing issue for anyone up there. I feel like if you/your PM screens tenants enough that hopefully evictions are rare but reading articles about the new laws passed I am proceeding with a lot more caution than before.

Originally posted by @Kenny D.:

I was actually looking at this prop. in Albany. Anyone know about it? https://www.zillow.com/homedetails/105-Ontario-St-Albany-NY-12206/29646606_zpid/

Kenny, Personally I would not invest in that house. Obviously it depends on your situation and what you are looking for, but as you go north of Central Avenue things can get a little sketchy. I would say stay south of Washington Avenue if you were looking in that area because you will most likely be renting to C to D tenants.

Once again this is personal opinion and if it makes sense in your personal situation then go for it, but I would look into a more expensive house with a higher quality tenant pool who will not only pay more for rent, but also minimize your maintenance costs on the house.

 

It's certainly not a market poised for growth.  The state government as the region's largest employer provides a good deal of employment stability.  However, there isn't much job growth otherwise, and many formerly important employers are in trouble (GE, for example).  From what I see in my county (Saratoga), the population tends to skew a bit older.  There's no rush to alleviate school overcrowding, and many people you see out and about are middle-aged to elderly.  My concerns with the market are demographic - low growth, aging population, and economic - there's not much job growth to attract or keep working age residents, especially Millennials and Gen Z.  An aged population will obviously vacate their homes at some point, and if an area isn't attracting newcomers it won't bode well for home price appreciation.

@Kevin Urena I have some investments outside of Albany. I have definitely looked at (and thought about) quite a few properties between Albany and Schenectady but haven't pulled the trigger on anything. A couple things to keep in mind is that the property taxes are pretty high and there is practically no appreciation. Will it be the next big market? I highly doubt it but if you can find the right cash flowing property I think it makes a good area to invest in. Best of luck to you!                  

@Wesley W. thank you for that link. It sounds like something we all need to know about. I'm going to go read that article now.

You can invest anywhere if you know what your criteria are. Inner city areas all over Upstate NY; Rochester, Buffalo, Syracuse, Albany, etc have little to no appreciation but the properties aren't DEPRECIATING either. Understand your own investment strategy, if you're looking to value add and refi out then it's going to be very difficult to do so in any of these areas, if you're okay leaving 20% in on a CV Loan and reaping the excellent cash flow then it makes sense to buy in the inner city. 

@Ronald Starusnak you are right about being able to make money if you know the markets in upstate NY.  An interesting development in Rochester has been the appreciation.  

Back in May this year realtor.com ranked Rochester, NY as the hottest market in the country.  

In August Business Insider Rochester was ranked 5th in the country for affordable home prices and robust local economies

Also in August Rochester was ranked as the 4th hottest market in the county.  

October Market Watch Redfin.com ranked Rochester as the least likely to tank during the next recession

Prices for entry level houses have been rising quickly and selling in a short period of time.  Good luck with the hunting! 

I own a property management company that covers the whole capital region, and Albany is a bit overheated in spots right now that can make it tough to cash flow, but deals can still be found.  Be very careful about the tenants you inherit because NYS has already introduced lots of new laws that make it much harder to evict, and it's fairly likely that rent-control could pass across NYS come Jan in the next legislative session, so if you're planning on buying an occupied fixer-upper, be careful.  And by the way, just last week Cuomo signed into law a bill making it illegal to collect rent from any tenant or evict a tenant residing in a property without a valid certificate of occupancy, so plan on bringing anything up to code before collecting your first dollar of rent, even if the prior owner was collecting.  

albany is great for investors looking to get into the business. like most already said appreciation is not really there depending on what you paid for properties. i love the market up there most my properties are two family houses that were purchased for 70k and lower and my returns are over 20% in D areas i like the section 8 program you can find good section 8 clients that wont destroy your property and they have plenty of other programs that help when people cant afford there portion of the rent also clients can lose there section 8 voucher if they do not pay which is a good thing for owners. that being said 2 3bdrm apartments section 8 pays 1300$ each thats 2600$ minus taxes and garbage you will make over 20k a year off lets say 60-100k investment who wins? once all these run down areas are revived and rented you will see appreciation. from what im hearing albany can be the next tech capital of america following the bay area ca. will it happen? maybe! for now enjoy the income the return is great

I live in Saratoga and grew up in upstate NY.  I can tell you that Albany and the Upstate market are excellent markets.  I am not sure if you would consider it the "next big market" but I think you will find it to be a solid market.  When much of the country was experiencing a downturn, values held up pretty well upstate.  So as long as you find the right deals, you can feel pretty confident in a down market.

A great group to join is Action Investor's Network.  They meet tonight in Latham at The Century House (always the 3rd Monday of the month).

Best of luck!
Ed Barone

Anyone have thoughts about Center Square vs. rest of Albany?  or other areas in albany downtown that could be promising?


also anyone have contractor recommendations for the Albany area? i bought a 3 family recently, and looking for good handyman and other contractors.  not finding the quality contractors I was expecting from homeadvisor, 

i am new to the area and could use the help.