Best Places to Invest in Real Estate in New York

Best Places to Invest in Real Estate in New York

New York State is a unique opportunity for real estate investors, especially as you look outside New York City. In early 2021, there was a mass exodus from the city, but most people who left stayed in the State. Between July and September of 2021, over 6,000 new New Yorkers put a squeeze on the state-wide rental market, driving prices up.

Since New York State is so popular, we decided to take a look at cities in the State that are best for property investment.

To narrow our search, we used Redfin’s “Compete Score,” which offers a competitive analysis for buying a home. We only included cities with a compete score between 60 and 70 (out of 100). Cities with a compete score in this range are most likely up-and-coming with a good resale value. But, buying a property in these areas won’t break your budget.

If you’re curious about getting a rental property in New York State, here are the best places to invest in real estate in New York State.

TIP: Not sure if you’re ready to take on New York? You can also use Baselane’s analytics tool for landlords to help evaluate your Rental Property ROI in New York.

1. Albany

  • Median listed home price: $211,000
  • Median price per square foot: $135
  • Rental vacancy rate: 4.8%
  • Schools in the area: 36 Elementary Schools, 22 Middle schools, 15 High Schools
  • Median rental income: $924/month
  • Household median income: $69,953/year

Albany is the Capital of New York State, so the city itself is steeped in history, and many of its residents have good jobs with the government. The second-largest employer is the GE Research Center.

It’s in a great location for commuting (3 minutes faster than the national average) and for weekend getaways—New York City, Boston, and Montreal are all within 3 hours. If you’re more the nature type, you can drive to Saratoga Springs or the Adirondack mountains within an hour. Downtown Albany has museums, art galleries, shopping, and plenty of restaurants to enjoy many of Albany’s locally brewed beers.

The median age is 30.9, with 43% of the population being between 20-54 years of age. The population remains relatively flat at under 100,000 for over ten years. According to US News, when compared to the national average, Albany has a better value for housing costs, a healthier job market, and a lower crime rate. Unemployment currently sits a few points higher than the national average and while there are many schools, not all get great grades in the downtown core, head North East to find the better ones.

2. Buffalo

  • Median listed home price: $197,425
  • Median price per square foot: $123
  • Rental vacancy rate: 4.9%
  • Schools in the area: 36 Elementary Schools, 18 Middle Schools, and 18 High Schools
  • Median rental income: $735/month
  • Household median income: $60,105/year

Buffalo offers much more than hot wings and great sports. While most cities in New York State are expensive to live in, Buffalo is 4% lower than the national average and 28% less expensive than New York City.

Here’s some good news for property investors: 60% of residents in Buffalo choose to rent, likely due to the low inventory and rising prices. And its growing population of college students (thanks to affordable rents) is a key factor for keeping your vacancy rates low.

Buffalo boasts a low unemployment rate too. Western New York State is becoming a valuable tech and research center, with plenty of manufacturing jobs, as a General Mills plant sits right in the downtown core.

Crime, however, is a whopping 88% higher than the national average, so try to find a safe neighborhood and be sure to buy landlord insurance. The taxes are higher, and the winters are colder, but because of its proximity to the waterfront, embrace the outdoors and Buffalo’s many waterfalls and hiking trails to find an escape from the city.

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3. Geneva

  • Median listed home price: $151,900
  • Median price per square foot: $93
  • Rental vacancy rate: 9.2%
  • Schools in the area: 5 Elementary Schools, 2 Middle Schools, 2 High Schools
  • Median rental income: $738/month
  • Household median income: $42,472/year

Geneva is a smaller town with a population of 13,048, but it’s mostly concentrated in the downtown core, where you’ll also run into the very top of Seneca Lake (the largest of the Finger Lakes). There you’ll see couples and families enjoying the water park, sailing and windsurfing, and walking along the shore trails.

More recently, Geneva has become a wine region, too, maybe due to its interesting architecture and old-city charm, including the Smith Opera House, Hobart and William Smith College Houses, and Belhurst Castle.

While most people in Geneva own their homes, there is ample opportunity for property investors, especially for its waterfront, hour proximity to Rochester and Syracuse, and year-round local events keeping the town’s residents loyal to its community.

4. Schenectady

  • Median listed home price: 110,800
  • Median price per square foot: $143 single-family homes, $294 Condo/Townhomes
  • Rental vacancy rate: 8.7%
  • Schools in the area: 36 Elementary schools, 13 Middle Schools, 7 High Schools
  • Median rental income: $854/month
  • Household median income: $65,773/year

Schenectady is home to over 60,000 people with an urban feel, and it ranks well for its liability, cost of living, and education offerings. Crime rates, however, are a little higher than comparable nearby urban centers.

It has an old-timey feel, especially when visiting some of its top tourist destinations like Proctor’s Theater, the County Historical Society Museum, or the Stockade Historic District. You can also explore nature outside at the Central Park Rose Garden and Jacksons Gardens, or head inside and wave at sea life at the Via Aquarium. Don’t miss the Edison Tech Science Museum; it’s part of the city’s heritage.

While Edison wasn’t born in Schenectady, a colleague, Steinmetz persuaded Edison to set up Edison Machine Works, which would eventually become home to General Electric, still one of the top employers in the city and may be the reason why the cleantech industry provides so many jobs in the area.

5. Westbury

  • Median listed home price: $614,923
  • Median price per square foot: $391
  • Rental vacancy rate: 7.4%
  • Schools in the area: 12 Elementary Schools, 5 Middle Schools, 3 High Schools
  • Median rental income: $1,805/month
  • Household median income: $101,250/year

Westbury is a village on Long Island with a population of around 15,000 people. Many reviews speak about how calm of a place it is, maybe because it’s only 18 miles east of busy Manhattan—a 45-minute commute that allows you to escape the city sounds,

Westbury is a great place for families with low crime, poverty rates, and cost of living paired with good education and liability scores. The struggle may be employment in the city if most of its residents flee to the big city for the big bucks.

For property investors, the hardest part may be finding the ideal spot due to low inventory. Schools are currently experiencing some overcrowding, so if they can build new ones, expect the population to boom even more.

Is New York State a Good Real Estate Investment?

As the song goes, if you can make it there, you’ll make it anywhere. With NYC being so close, it opens up the jobs for many who may be willing to pay high rents, and continuous demand means low vacancy rates. Plan to buy and hold for a profitable investment. Numbers change all the time, though. Take the time to speak with an agent who lives in your areas of interest and use our Rental Property ROI Calculator to evaluate your New York Rental property deal.

FAQs
Is New York State a nice place to live outside of the city?

Yes, but Westbury is more expensive than Buffalo, depending on how you define nice and value. Westbury is a small town near NYC, whereas Buffalo hosts major sporting events and has big-city amenities. It is best to shop around with your needs to see if it suits your lifestyle.

Is there a large rental market in New York State?

It depends on the city, but you can always find available renters. Pay attention to vacancy rates to help with your calculations and know if that particular city within New York State has options for landlords. Use our Rental Property ROI Calculator to evaluate your next New York State rental property deal.

How do house prices in New York State compare to other areas in the US?

You can find affordable homes in New York State, especially outside major urban centers with smaller populations. The further you get from NYC, the cheaper the price will be unless you end up in another major city like Buffalo, where the average price is around $200,000. Aim to spend about 30% of your income on housing, and then you can decide where you want to live.

How do other cities in the State compare to New York City?

It depends on the city. Places like Westbury, Geneva, and Schenectady are smaller towns with quaint appeals and tight-knit community vibes. Syracuse, Rochester, Albany, and Buffalo are more like New York City in that they have larger populations, job opportunities, and access to more amenities and experiences.

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