Which area is a better investment? Pls give me your thoughts

[Steve R.]

I am looking to buy 2-4 family buildings in 2 areas close to NYC.
I'm looking for an "intelligent" thought process as to which area is a better investment.
I'm usually a long term investor who buys and holds unless there is a crazy market like before but I don't expect that anytime soon.

Area 1

2 Family is 200k.
Taxes 3k
Rent $1900 (950x2)
Travel time to NYC is 35 minutes and you need to take 2 trains. ($4.00 each way)
This area is a rough area that was getting better and now is quiet.
I had a few buildings here and sold all but one in 2008 because prices went up so much so fast so I took the profit.
I can get good tenants but I have to show the unit 10-15x.
(I don't mind since this is my job)

Area 2

2 Family $350k
Taxes 6k
Rent $ 2300 (1150x2)
Travel time to NYC is 12 minutes and its one train or 3 stops to the City. Very good!
People rent here because of the fast comute.
There area is not as rough as area 1 but it has not reached its potential yet.
Its safe to say that this area will get better before area 1.

My "logical" thinking was to buy in area 2 since it is a much better comute to NYC and it will get better quicker than area 1.
But after looking at the numbers, area 2 is more expensive, taxes are a lot higher yet the rents are not significantly more.
A 3 family in area 2 can have taxes as high as 8-9k.

I'm leaning towards area 1 but are there other issues I should consider?
I don't mind owning properties in either area, just want the best investment.

Thanks for your input!

[Joel Owens]

When the economy cycles urban core usually recovers first and then sprawls out into suburban and then to rural areas last.

With gas prices where they are at people are focused more on cutting commuting cost and also time away from their loved ones.80% of people dislike their jobs so they want to be finished for the day as soon as possible. In town living where everything is a walk or bike ride away is becoming popular again.

In area 2 have you looked at the tax assessors site for the last 3 years or so to see at what percentage the taxes how gone up,stayed flat,or declined??

If you sold and made a bunch of money before then you want to preserve that money and invest in less risky investments or only allocate a small portion of your portfolio to high risk growth properties.

The taxes of 6k wouldn't bother me as much if that was a constant.Meaning 3 years ago they weren't charging 10,000 in taxes before the market took a dip.