From Toronto, looking to invest in Buffalo & Rochester area.

[Somesh Mukherjee]

Hello all, I am from Toronto, Ontario and own a few properties locally. I am looking to diversify and start with by buying a small apartment building in the upstate NY area (a few hours drive for me). 

From my research so far, Buffalo and Rochester rental markets seem strong at the moment. I was looking for some advice (viable target area, financing options and credible PM/realtor contacts) from the experts here though especially if you are in a similar boat as mine (reside in Canada/Ontario area and invest in US).

Thanks much, in advance!

[Peter W.]

I’m mostly a new investor in the Rochester area (I own one property). I will give you some of my highlights.

People in Texas complain about their property taxes at 3% ours are about 4.5%.
New York in general and Monroe county specifically are very tenant friendly.

Depending  on the town, the code inspectors/police can be quite anal.

Since Covid and the 2020 protests we’ve seen an increase in crime in the city and therefore weakening demand in the city proper and increasing demand for the suburbs.

Industry is well diversified—University of Rochester (medicine) L3Harris (defense) xerox (IT) and paychex (software/hr)) and relatively recession proof.

Population growth is low and therefore appreciation (except the past 4 years) has been moderate as well.

There aren’t many builders in the area so supply is relatively fixed.

Home (and rent) prices are both affordable with homes typically being less than 1/3 median household income and rent being similarly affordable.

For single family homes at 8% rent will cover piti with about 100$ to spare in the A areas. In b areas it's about 75% of rent to cover PITI. In the c areas in the city you are at closer to 50-60% or rent covering piti. This assumes ~8% interest rates.

Interest rates in New York tend to be 25-50 points higher than the national average although maybe I suck at finding good mortgage brokers.