Jacob, Yes it is a good time to buy into rentals. In Western NY it will be for some time. You have the right idea- long term. Too many buy a beat up house for cheap, rent it for a few years, then try to unload it. Jamestown is starting to get out of this cycle. Like Buffalo but a lot smaller, Jamestown could use some good property owners who are interested in more that just the money. Lorraine works directly with a property manager. I am jumping into it as well. We are doing the management side, not ownership.

My wife and I are agents in Chautauqua County. If you decide to change your location give us a call. No matter what you do, don't take the 'make a ton of money' approach. Look for a good steady income over the long haul.

A few questions-
Are you planing on doing repairs yourself? If not you will need good honest contractors.
Are you in an 'owners association'? You can get some good help there. Just be careful about those who want you to just look at the money. Most owners have absolutely no repair escrow or savings.
Do you have a good real estate agent? You need someone who is not going to just sell you anything. Like myself if they have a background in construction and home repair that helps them value a property for you.
Learn how to do background checks. Scrutinize a prospective tenant before you rent to them. Find tenants that don't want to buy for reasons other that they are lazy. Our website homesearchontheweb has a new tag line- 'matching attentive property owners with appreciative tenants.' That will be your biggest challenge.
Decide what to do about sec8. You will need to know how hud works and the rules they have.


Email us if you need some more input or would just like to chat. Wish you well.

I know it is probably late to answer Jacob's Question, but the answer has also changed since he asked it. With interest rates as low as they are it is a fantastic time to buy an investment property. The fredonia area rents fairly easily and many buy a 2 unit home the rent from the second pays the mortgage and taxes, allowing the buyer to acquire equity at little to no cost.

Hey Jacob my name is Ben, I am in the process of looking to purchase my first investment property in the dunkirk/ fredonia area as well. I've never been able to find ppl in our area to keep in contact with about the market and different opportunities since we are in a much smaller less glorified market. Just wanted to give you my email address if you are interested in talking about the area in more depth feel free to write me at ben_ross16@hotmail.com

Jacob,
If I were you, I would hit the library and do a few months of research. Find some landlords and ask them about their experiences--make sure the landlords aren't real estate agents who will try to get you to buy (as they do here).

We are in the biggest housing bear market ever. It couldn't be a worse time to buy investment properties. Check out this article:
http://www.businessweek.com/magazine/content/08_06/b40700407…

Good luck,
John

My opinion is that as homes are being lost to short sales and foreclosures, there will be a higher demand for rentals.

I love passive income...

Rentals are a lot of work and you must have a stomach for being a landlord or hire someone to property manage for you.

Have a Realtor put you on an automated prospect match in the area of your choice for houses that are marked "short sale", "bank forced sale" "foreclosure or preforeclosure" or those that are marked "as is" or need further work.

Be aware of landlord/tenant laws in various counties...some of them are really touch. Queens & NYC are exceptionally touch.

Aside from references and still security prepayments, listen to your gut on accepting tenants. Have a good lease drawn up that provides you with maximum protection for each county.

In certain counties, Section 8 tenants are ideal...check to see what guarantees the local government offices offer and what kinds of subsidies and "perks" for the landlord in the way of subsidizing repairs, etc.

I just want to thank all of you for your replies. All of your feedback is a big help in my endavor. Joe, you mentioned that my first property might not be owner-occupied. In fact, as I am moving back to the USA around closing time (my father has power of attorney for signing things, and my brother is helping with the physical aspect). The first property will be owner-occupied. The second property will be as well-- I will be co-signing that with my brother, who is going to move out of the Fredonia dorms and into that house. After that, the properties will not be owner-occupied.

I am looking at this from two perspectives:

1) Building up equity (not profiting from appreciation-- it'd be nice but is not a primary objective)
2)A source of small income initally, growing with the number of houses and my increasing ability to avoid duplication of effort.

I have been pondering this for years and I am finally in a position to do this. If anyone has suggestions, then please let me know :)! I'd be very glad to hear from you. I not hoping to expand dramatically-- buying 10-20 houses in the next six years is the plan, more if things go insanely well, but that's the plan. I've got the income from abroad, thanks to a strong local currency and a weak dollar.

Again, thanks for any advice!

Real Estate is a great investment providing you`re in it for the long term.
I admire those so called "Realty TV shows" such a "Flip this house' which protray the Investor as actually knowing what their doing,majority have no clue in understanding how the market reacts.

We work with investors who are able to formulate in their minds not every home will produce huge profits or a pot of gold in the shower!

With the stock market on a down turn as it has been off and on over the past year, investors are realizing that real estate is still a good investment. As in stocks & bonds, if you buy it right, you could see a good appreciation of your investment over a period of time. If you want to be a professional landlord, you need to be prepared mentally AND financially for this undertaking, especially if your first project is going to be non-owner occupied. You have to be prepared to be able to borrow money unless you have the cash. You usually cannot borrow money at the same rate as an owner occupied property, same holds true for insurance. You have to be able to carry the property for a few months without rental income or only receiving partial income. Understand that you will be entering the world of complaints, notices from the housing authority, no rent check on the first of the month, unexpected repairs or damages and a lot more. On the other hand, there may be money available for assistance to purchase, renovate and modify (especially in the case of providing housing for the disabled). Good luck!

Find a good Realtor in your area who can help you determine the Return on Investment (ROI) for rental properties in your area. Most markets are currently seeing an overabundance of foreclosure and short sale properties, which can be purchased at lower than market value. And the homeowners who have lost homes to foreclosure or short sales probably had their credit affected, meaning they can't qualify for a new loan - thus they need a rental property. We have seen a surge in rentals in the greater Phoenix, AZarea, but not all properties make good rentals. Location, condition, and price will all be factors for any property you consider.

Hello Jacob,

Do your homework. Target your market area. Find out what the average rental price is, turn over rate, cash flow you would need for repairs. Keep in mind, it may not rent immediately or the tennant may fall behind.

I agree with investing in Florida too. We have snow birds coming down here and rentals are at a premium.

Have you ever entertained commercial? That particular market is doing extremely well in Tampa with not only small business parks offering office space but also high rise. Just a thought.

Jacob,
In South Florida there suddenly seems to be a shortage of rentals, which means the landlords are having a field day.
If you`re looking at investments look at Pembroke Pines,Fla. where you can purchase a home for $199K and rent it for $1700 per month.