Rochester, NY rental market

[Niti Jamdar]

Hi Everyone,

Posting my first question here. I'm looking to invest in a multi-unit rental property. I was comparing various locations and found Rochester, NY strangely appealing on loopnet. It had a very high cap % (20%) for multiple properties. However, some of them were being offered with an added offer to manage them. Am I falling into a scam waiting to happen or is the rental market in Rochester, NY really that attractive?

Thanks in advance for your input!

[Jason V.]

@Niti Jamdar Rochester is a pretty typical city in a lot of ways: a couple of streets can make all the difference in the World. 

If you're not familiar with Ben Leybovich yet, I would definitely take the time to get familiar with his writings before pulling the trigger on a lower end property. I'm assuming, of course, that is the type of property you're looking at in Rochester. Although I may be wrong, those seem to be the properties many long-distance investors get interested in here. 

Ben is a big proponent of two things: Not buying cheap properties, and not paying property managers. Even if you disagree with him, and many people do, it will force you to look harder at your investment strategy. 

I can't imagine we're that different from Philly, so I'm curious as to why you're not interested in operating locally first (unless of course, you already do.) Pittsburgh is also one of the best markets in the Northeast, with solid job growth and development (last I knew anyway.) I'd stick close to home for the first couple - just my two cents.

The only major differences I can think of from PA, where I have spent quite a bit of time for business, is that the taxes and regulations here are a lot tougher.