REAL ESTATE INVESTING IN ROCHESTER
Real Estate investments can bring about higher than average long term returns compared to the stock market, but the investor needs to be prudent in choosing their investments and property managers. There are many great areas to invest in the US in real estate, but Rochester, NY has a number of key factors that make it attractive to many US based and International investors. Investors from Israel, Australia, England, and others are regularly investing in the Rochester, NY market because it offers three key factors:
High Occupancy Rates – High rate of professionals with student loan debt results in a high percentage of rentals Stable Economic Environment – Reliance on many small businesses in a wide range of industry sectors resulted in no down-turn in the real estate market during the crash of 07-08
Low Entry Prices with Higher Cap Rates - Many Single Family and Multi-Family homes can be purchased for $60k or less in stable areas resulting in TRUE Cap Rates of 12-15%.
In 2011 Rochester was ranked #3 in the US Rental Markets and one of the Top 10 Places to buy a Rental Property. The market for rental properties continues to stay strong in Rochester with an influx of investors from Europe and Asia increasing in the last 2 years.
We do not promote properties in rough neighborhoods just to show great cap rates on a Pro-Forma like other turn-key firms. We are looking for properties in areas that we own ourselves to maximize return while having stable tenants with less turnover.
Typically we are offering 2-4 Family properties selling between $25-35k/unit that have been rehabbed, with current Certificates of Occupancy, and fully tenanted with 1 year leases, and being run by one of our two affiliated Property Management firms.
These properties are not priced over market-rate. You aren’t going to be buying a house today for $20-40k more than market value just for the benefit of a “turn-key” property putting you immediately under water. We aim for a long term relationship and if you need to sell a house in the future we want to make sure you can recover your initial investment. With the stable housing prices in Rochester.
All of our houses are offered on a TRUE cap rate basis which includes the following:
Vacancy Rate of 5% - As many of our properties are fully rehabbed before sale to the end investor they attract a higher quality tenant that stays for a longer period of time Property Management Fees of 10% - High quality property management doesn’t come cheap, and the going rate from the top firms in Rochester is 10% of rents/month.
Repair Rate of 10% - While we renovate each house before sale to the end investor, we still realize that repairs are going to occur, and long term capital improvements need to be accounted for.
Accurate Utility Bills – No under-estimations of utility, lawn care, snow removal costs to make the property look better. You need to know all of the costs up front to make the right decision.
Remember – If you are interested in learning more about investment opportunities in the Rochester, NY market, feel free to call Dave Savage at any time 585-708-7080 or email him at Dave@UpstatePropertyInvestors.com