Investing in Upstate NY...Yay or Nay??

Brooklyn, NY · Member since 2017 · 2 posts · 2 votes

Hi Guys! How do you feel about investing in multi-family units in Upstate NY (specifically Schenectady) today? I know GE was a big draw back in the day in regards to employment, but I'm not sure about the current market. Gentrification has taken over pretty much all of New York City (the 5 boroughs), so I'm trying to think outside of the box. Any thoughts?

2 Reply

316 views

Most Popular Reply

Vitaliy VolpovPro Member

Investor · Albany, NY · Member since 2015 · 134 posts · 132 votes

Hi Auria,

I invest in several areas around the Capital Region, including Schenectady. Just like any city, in Schenectady, there are some good parts and some bad ones for investing. The main downtown strip has undergone a temendous revitalization in the last several years. Also, the area around Erie Blvd has seen a lot of growth, including the new casino that opened not too long ago. There are also some new construction projects ongoing. So, the area has definitely seen some significant improvement. What remains tough is the regulatory environment. Schenectady code enforcement is very strict and some would say difficult to work with. Schenectady also requires a new Certificate of Occupancy every time you turn over a unit, which comes with a fee to the city. Depending on the quality of the units and the location, the tenant base may be challenging as well.

I think overall, the area is on the upswing and there are definitely still a lot of opportunities to find properties at a discount. If you decide to invest in Schenectady from afar, I would suggest getting in touch with a local investor/real estate agent to help you. Hope this helps.

Vitaliy

11 Reply

See this reply in the discussion

57 Replies

Jump to latestLatest

Sort by

David MacClintock
Investor · Oneonta, NY · Member since 2015 · 57 posts · 27 votes
8y
Upstate is fine. Schenectady is awful. Look into the rules they have regarding rental certificates. They had a code enforcement officer kill people a few years back and things are not ok since.
4 Reply
Account Closed
Rental Property Investor · Devon, PA · Member since 2016 · 28 posts · 22 votes
8y
I wouldn’t do it. I grew up in upstate ny and it’s not really a booming area of the us to say the least.
If you study the macro economic trends you can see that more people are moving out of upstate ny than into it.
Also, small towns are dying accross the country in general with the exception being college towns.
Feel free to ask me any specific questions.
4 Reply
Vitaliy VolpovPro Member
Investor · Albany, NY · Member since 2015 · 134 posts · 132 votes
8y
Hi Auria,
I invest in several areas around the Capital Region, including Schenectady. Just like any city, in Schenectady, there are some good parts and some bad ones for investing. The main downtown strip has undergone a temendous revitalization in the last several years. Also, the area around Erie Blvd has seen a lot of growth, including the new casino that opened not too long ago. There are also some new construction projects ongoing. So, the area has definitely seen some significant improvement. What remains tough is the regulatory environment. Schenectady code enforcement is very strict and some would say difficult to work with. Schenectady also requires a new Certificate of Occupancy every time you turn over a unit, which comes with a fee to the city. Depending on the quality of the units and the location, the tenant base may be challenging as well.
I think overall, the area is on the upswing and there are definitely still a lot of opportunities to find properties at a discount. If you decide to invest in Schenectady from afar, I would suggest getting in touch with a local investor/real estate agent to help you. Hope this helps.
Vitaliy
11 Reply
Raul R.
Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
8y
Personally I would look South, look for a State w warmer weather so you don’t have to worry about snow removal, look for a State w Friendlier Landlord laws. I prefer to flight South for 2 hours than driving North for 2 hours.. That’s just me, I’m sure others will have different opinions
6 Reply
Tim BurkePro Member
Rental Property Investor · Ithaca(ish), NY · Member since 2016 · 30 posts · 23 votes
8y
Investor from the Ithaca area here. I own a couple of multifamily properties in the area between Ithaca and Cortland. One of the interesting things about the economy here is that it is in large part driven by four schools: Cornell, Ithaca College, SUNY Cortland, and Tompkins Cortland Community College - meaning that the market here stays relatively stable and since there are lots of non-permanent people, the rental market stays reasonably strong (even if you aren't doing student rentals). It looks like there are a couple of schools in Schenectady, so that may help keep the market stable even if there is some downturn in future.
YMMV, so do your homework.
7 Reply
Jonathan Twombly
Rental Property Investor · Brooklyn, NY · Member since 2014 · 722 posts · 1k+ votes
8y
@Auria Moore, @Tim Burke is onto something. In the aftermath of the Great Recession, when I started in the business, I tracked a number of markets around the country, including Ithaca, NY and Charlottesville, VA. Both cities are anchored by huge universities. And both cities saw unemployment stay below 6.5%, even though nationally unemployment peaked at nearly 11%.
You’ve also missed the most obvious upstate market, that is easy to access from Brooklyn: Albany. It’s anchored by the state government, which is never going away, and by universities and hospitals. It missed the Bubble going up and coming down. It’s definitely cheaper than NYC. It’s worth a look.
10 Reply
Michael Gansberg
Investor · New York City, NY · Member since 2015 · 388 posts · 563 votes
8y
I agree with @Jonathan Twombly - there are certainly opportunities in the Capital District. Schenectady has been a challenging place to invest for quite awhile- with GE paring down further, I don't know that I'd make a bet on it- and were casinos a panacea, Atlantic City would look quite different than it does.
Troy has been very good to me- it's a bedroom community to Albany, and its downtown is pretty happening in its own right. Waterford is similar- a bedroom community and a quiet place where reasonable returns are possible. I've brokered some deals in Watervliet(though I don't own anything there,) my clients who've bought there are happy that they did.
You could look at Cohoes as well, but the local government is a little challenging. Amsterdam, I've heard through the grapevine, has an odd problem with their water system- it tends to erode certain parts of plumbing systems and leads to weird and catastrophic failures. Plus if you buy a building with a vacant unit, the local government can try to make that a permanent vacancy(shrink your unit count.) Such heavy-handed tactics are very bad for property values. Hope this helped, @Auria Moore.
3 Reply
Aqil Dharamsey
Rental Property Investor · Rochester, NY · Member since 2016 · 303 posts · 154 votes
8y
Hi guys - I may be way up there ( Rochester ) but it has been amazing. Been doing it for the last 13 years. Like any other city, there are some great areas and some not so much. The city is tough to deal with but fair. Housing is cheaper then the 5 boroughs and the caps are in double digit. Building a team is key while growing in volume quickly to offset losses from Evictions, repairs, etc. PM me and I will be happy to share additional information.
5 Reply
Ryan VienneauBusiness Member
Investor · Stillwater, NY · Member since 2015 · 149 posts · 121 votes
8y
Schenectady is fine, just make your units nicer than average and you'll be in good shape. I have 2 duplexes there, and my 3 BR units are getting $1100+ and I have a 4 BR getting $1400, and I'm into them for about $50k/unit average after repairs, so better than the 2% rule. In fact, my cap rates are over 15 in both, and my tenants are great (carefully screened). They're both in C+ neighborhoods.
Troy is stupidly overpriced, it is equally murder-y as Schenectady in parts but everyone is overpaying because of the hipster vibe going on downtown, that bubble will burst eventually when Troy investors begin realizing that rents don't support the sell price and nothing cash flows. Schenectady has also done a great job revitalizing its downtown like Troy but prices don't reflect it yet.
Veno Properties LLC4.3154 Reviews
Website View Page
4 Reply
Account Closed
Rental Property Investor · Glens Falls, NY · Member since 2016 · 176 posts · 169 votes
8y
Glens Falls is a great option. I would personally stay out of Schenectady- I used to work right on Erie Blvd and I am glad I don't anymore! GE has had massive layoffs.
1 Reply
Kathleen Harrell
Schenectady, NY · Member since 2018 · 5 posts · 2 votes
8y
Just heard that a couple of new big businesses are coming to Glenville Industrial Park soon which will be a boost to the economy in the Schenectady area. Local jobs will generate potential for real estate investments here.
1 Reply
Evin Lederman
Flipper/Rehabber · Hyde Park, NY · Member since 2018 · 28 posts · 8 votes
8y
I would be interested which towns the 2% rule applied to. And I'd would appreciate if people could point out what towns have:
1) Good rents relative to purchase price
2) Inventory for BRRRR
3) Reasonable rent rules.
4) Some chance of appreciation
Thank you @Account Closed for pointing out that Glen Falls is good, but please provide details.
Excellent job with those details, @Ryan Vienneau!
Is anyone a little more downstate? I work near Poughkeepsie. Thanks!
Evin
0 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
8y
The cash flow in way upstate, read Rochester, Syracuse and Buffalo is crazy good I don’t know why more people don’t invest there To me a largish company could provide turn key properties to investors from CA and make some great money.
0 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
8y
BTW how do you edit a post on the app? Meant to add appreciation in those 3 towns is about non existent
1 Reply
Aqil Dharamsey
Rental Property Investor · Rochester, NY · Member since 2016 · 303 posts · 154 votes
8y
Michael Plante although the appreciation is next to nothing in certain parts of upstate NY, the cash flow makes up the difference. Double digit CF in mostly all larger cities is great. Mostly 3-4% rule is realistic in these markets.
0 Reply
Michael Plante
Deland, FL · Member since 2017 · 2k+ posts · 1k+ votes
8y
Originally posted by @Aqil Dharamsey:

Michael Plante although the appreciation is next to nothing in certain parts of upstate NY, the cash flow makes up the difference. Double digit CF in mostly all larger cities is great. Mostly 3-4% rule is realistic in these markets.
Did you not see I stated the cash flow was crazy good?
The OP also asked about appreciate, hence my noting that appreciation is about nothing
0 Reply
Daniel Montes
Rental Property Investor · Brooklyn, NY · Member since 2014 · 92 posts · 17 votes
8y
Cash flow is good but appreciation is icing on the cake and builds wealth faster.
0 Reply
Matthew Irish-JonesBusiness Member
Real Estate Agent · Buffalo, NY · Member since 2017 · 2k+ posts · 2k+ votes
8y
Been investing and managing properties in Buffalo since 2011. Cash flow is fantastic and appreciation has been just as good.
With medical corridor, UB expansion, Tesla, and other large employers coming in, plus the Buffalo Billion, water front development, etc... some home values have doubled. I have a property in the Elmwood village that has doubled in value since 2011 and is my best cash flow property.
I can't comment on any other NY markets as I am only in Buffalo NY right now.
Irish Jones Realty4.947 Reviews
View Page
2 Reply
Martin Grizzanti
Investor · Rochester, NY · Member since 2015 · 499 posts · 169 votes
8y
Originally posted by @Aqil Dharamsey:

Michael Plante although the appreciation is next to nothing in certain parts of upstate NY, the cash flow makes up the difference. Double digit CF in mostly all larger cities is great. Mostly 3-4% rule is realistic in these markets.
I agree with Aqil. Rochester has been good so far.
0 Reply
Eric Stets
New York City, NY · Member since 2016 · 29 posts · 6 votes
8y
Originally posted by @Matthew Irish-Jones:

Been investing and managing properties in Buffalo since 2011. Cash flow is fantastic and appreciation has been just as good.
With medical corridor, UB expansion, Tesla, and other large employers coming in, plus the Buffalo Billion, water front development, etc... some home values have doubled. I have a property in the Elmwood village that has doubled in value since 2011 and is my best cash flow property.
I can't comment on any other NY markets as I am only in Buffalo NY right now.
Great info. Most of the duplexes I see available are roughly 110-150K with total monthly expenses around $850, with each side renting out around $800 or so. Looks pretty solid to me. Just try to stay in the lower property taxed areas..
0 Reply
Leandro Herbstein
New York, NY · Member since 2017 · 10 posts · 0 votes
8y
Totally off topic, but does anybody know a reliable roofer around Oneonta/Delhi area? I bought a foreclosure in Walton, NY and I need a new flat roof for part of the house, but has been impossible to find anybody. Apparently the good ones are too busy and the rest I contacted never showed up or came to check the roof, but never bothered to send me an estimate. I would appreciate any help. Thanks!!!
0 Reply
Daniel Akerman
Real Estate Agent · Astoria, NY · Member since 2016 · 60 posts · 55 votes
8y
Anybody done any deals in Binghamton? I had been looking at other communities out of state, but somehow Binghamton came across my desk and the numbers, at first glance look good. Would love to hear personal experiences.
0 Reply
Gary Kline
Attorney · Binghamton, NY · Member since 2016 · 127 posts · 84 votes
8y
like all investment areas it is not really yea or nea... each market has opportunities .... it all depends on the deal... you can usually make money if you buy right....
1 Reply
Ronald Starusnak
Property Manager · Syracuse, NY · Member since 2016 · 601 posts · 384 votes
8y
Syracuse area is fantastic. You just have to stay out of the bad sides.
0 Reply
Kenneth Myers
West Charlton, NY · Member since 2017 · 6 posts · 1 vote
8y
As stated above CF is very nice. I'm just west of Schenectady, the real issue is the property values. Deals are out there but very little wiggle room on equity after repairs so the BRRRR is a bit hard to do. You could find a 2unit 3bedroom for under 30k put 20k in it , avg about $550 per unit CF. But your at almost 90% LTV when you look to get your refi.
1 Reply

Join the conversationCreate a free account to reply, vote on answers and follow this thread.