Rental Investments in Jamestown NY

General Landlording & Rental Properties
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Rental Investments in Jamestown NY

Chris Sullivan
Buffalo, NY · Member since 2020 · 15 posts · 6 votes

New to investing and am currently in the process of learning and analyzing deals and I am finding several properties in the price range I am looking for ($45K-$75K) in Jamestown NY that cash flow well according to my calculations using the BP calculator. My concern is that Jamestown NY has a high crime rate (1 out of 27 chance of being a victim of violent or property crime), a declining population (current population 28,900and declining at a rate of -.071% annually) and 16% vacancy rates. So I like the prices of the properties and the fact that it seems as if they will cash flow, these other factors concern me. 

I am interested to see of others are having success in this market?

Thank you 

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Annie Johnson
Realtor · Seward, AK · Member since 2017 · 136 posts · 79 votes
5y

We invest near Jamestown. My husband grew up in Gerry, NY, and knows what areas to avoid and the areas that are desirable to live in. Message me. Id love to talk more :-)

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  • Nathan GesnerBusiness Member
    Moderator
    Real Estate Broker · Cody, WY · Member since 2010 · 28k+ posts · 41k+ votes
    5y

    This is a common issue. Look at Cleveland where people can still buy houses for under $50,000 and rent them for over $1,000 a month. The numbers look great, but there are a lot of downsides. You'll have higher turnover, greater vacancy, lower-quality renters, more damage and maintenance, etc. It really takes a local, hands-on investor to make those deals work and it takes a lot of time/energy.

    The DIY Landlord Book4.7248 Reviews
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  • Andrew Weiner
    Property Manager · Cleveland, OH · Member since 2020 · 268 posts · 315 votes
    5y

    Another consideration is that secondary markets get hit harder by drops in employment and they take longer to build back up.  If they are already at 16% vacancy now then I would be worried what it would look like after an eviction moratorium is lifted.  

    2Reply
  • Chris Sullivan
    OP
    Buffalo, NY · Member since 2020 · 15 posts · 6 votes
    5y

    @Nathan G. I appreciate your thoughts, I didn’t think of the quality of tenants and the potential for more wear and tear on the property. Seems like a bad move for a new investor to start in that type of market.

    Thank you

    0Reply
  • Chris Sullivan
    OP
    Buffalo, NY · Member since 2020 · 15 posts · 6 votes
    5y

    @Andrew Weiner Thank you for your thoughts! It is a small city where employment is limited as it is so I completely understand what you are saying

    Thank you

    0Reply
  • Annie Johnson
    Realtor · Seward, AK · Member since 2017 · 136 posts · 79 votes
    5y

    We invest near Jamestown. My husband grew up in Gerry, NY, and knows what areas to avoid and the areas that are desirable to live in. Message me. Id love to talk more :-)

    3Reply
  • Jessica Smith
    New to Real Estate · 14701 · Member since 2020 · 9 posts · 5 votes
    5y

    As much as I'd love to see this area thrive, there are many factors that are preventing me from from investing here: Electric (BPU) company holds landlords liable for tenants' outstanding bills (liens). Also, the lack of property management companies. High property taxes (almost at their constitutional limit). No prominent thriving industry or growth. Unless you are local and want the task of self-managing, I would look elsewhere. For now...

    3Reply
  • Taylor Ross
    Member since 2020 · 1 post · 0 votes
    5y

    I’m trying to get started in the Jamestown area!

    0Reply
  • John Bonhomme
    Investor · NY · Member since 2020 · 30 posts · 15 votes
    5y

    I purchased a 22 unit in Jamestown a few months back. The numbers on paper looked great and the area seemed to be revitalizing pre covid. I have had trouble with my property manager and am seeing a new one. @Annie Johnson and her husband were kind enough to recommend one. 

    I think if we form a group of OOS investors and all use the same team we will find success. We need to band together to make these deals more profitable. There can be great success as @Jessica Smith said. We just have to formulate a strong investment group and pool resources. 

    Property management is the biggest piece IMO.

    1Reply
  • Annie Johnson
    Realtor · Seward, AK · Member since 2017 · 136 posts · 79 votes
    5y
    100!!!!! 

    Originally posted by @John Bonhomme:

    I purchased a 22 unit in Jamestown a few months back. The numbers on paper looked great and the area seemed to be revitalizing pre covid. I have had trouble with my property manager and am seeing a new one. @Annie Johnson and her husband were kind enough to recommend one. 

    I think if we form a group of OOS investors and all use the same team we will find success. We need to band together to make these deals more profitable. There can be great success as @Jessica Smith said. We just have to formulate a strong investment group and pool resources. 

    Property management is the biggest piece IMO.

    0Reply
  • Dena Zeman
    Member since 2023 · 22 posts · 11 votes
    3y
    Quote from @Annie Johnson:

    We invest near Jamestown. My husband grew up in Gerry, NY, and knows what areas to avoid and the areas that are desirable to live in. Message me. Id love to talk more :-)


     Hi, would you be willing to give me the info on the desirable areas in Jamestown? I am currently working on 2 properties that i am trying to buy, but I would love to pick your brain since you invest in this area.  Thanks so much!

    0Reply
  • Dena Zeman
    Member since 2023 · 22 posts · 11 votes
    3y
    Quote from @John Bonhomme:

    I purchased a 22 unit in Jamestown a few months back. The numbers on paper looked great and the area seemed to be revitalizing pre covid. I have had trouble with my property manager and am seeing a new one. @Annie Johnson and her husband were kind enough to recommend one. 

    I think if we form a group of OOS investors and all use the same team we will find success. We need to band together to make these deals more profitable. There can be great success as @Jessica Smith said. We just have to formulate a strong investment group and pool resources. 

    Property management is the biggest piece IMO.

    Hi, I have a great property manager there. Also, are you still looking for investors there to partner with? Would be interested if so. 
    0Reply
  • John Bonhomme
    Investor · NY · Member since 2020 · 30 posts · 15 votes
    2y

    Hello, Sorry I haven't posted in a while. Dealing with multiple properties in multiple different states can be time consuming. With that being said I am happy to report that I was able to turn things around with the Jamestown property. It has been top to bottom fully gut renovated and will be grossing over 15k a month. Hoping to net at 9k+ a month. Having a good property manager is key and tenant screening. 

    0Reply
  • Michael SmytheBusiness Member
    Real Estate Agent · Metro Detroit · Member since 2023 · 4k+ posts · 3k+ votes
    2y

    @Chris Sullivan

    When investing in areas they don’t really know, investors should research the different property Class submarkets. If you apply Class A assumptions to a Class B or C purchase, your expectations won’t be met and it may be a financial disaster.

    Our OPINION for the Metro Detroit market (always verify each area for yourself!):

    Class A Properties:
    Cashflow vs Appreciation: Typically, 3-5 years for positive cashflow, but you get highest relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% the more recent norm.
    Tenant Pool: Majority will have FICO scores of 680+, zero evictions in last 7 years.

    Class B Properties:
    Cashflow vs Appreciation: Typically, decent amount of relative rent & value appreciation.
    Vacancy Est: Historically 10%, 5% should be applied only if proper research done to support.
    Tenant Pool: Majority will have FICO scores of 620-680, some blemishes, but should have no evictions in last 5 years

    Class C Properties:
    Cashflow vs Appreciation: Typically, high cashflow and at the lower end of relative rent & value appreciation. Can try to reposition to Class B, but neighborhood may impede these efforts.
    Vacancy Est: Historically 10%, but 15-20% should be used to also cover nonpayment, eviction costs & damages.
    Tenant Pool: majority will have FICO scores of 560-620, many blemishes, but should have no evictions in last 2 years. Verifying last 2 years of rental history very important! Also, focus on 2 years of job/income stability.

    Class D Properties:
    Cashflow vs Appreciation: Typically, all cashflow with zero or negative relative rent & value appreciation
    Vacancy Est: 20%+ should be used to cover nonpayment, evictions & damages.
    Tenant Pool: majority will have FICO scores under 560, little to no good tradelines, lots of collections & chargeoffs, recent evictions. Verifying last 2 years of rental history and income extremely important to find the “best of the worst”.

    Make sure you understand the Class of properties you are looking at and the corresponding results to expect.

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