When most people think of New York they envision the big city. And for good reason. New York City is the largest city in the United States and the 11th largest in the world. The city also offers a rich history, countless things to do, and some of the most expensive real estate in the world. Yet New York is a large state that is made up of 62 counties. The state offers a highly diverse real estate market with great investment properties at nearly every price point.
In this article, we will take a look at some factors that make New York one of the best states to invest in multifamily properties. We will then explore the 4 best places to buy investment property in New York in 2022.
Why Buying Investment Property in New York is a Good Idea
There are many reasons why buying investment property in New York is a good idea. These include:
- Strong economy. New York accounts for nearly 10% of GDP in the U.S. The financial activities sector accounts for nearly 1/3 of this amount. The next largest industries are professional and business services and transportation, trade, and utilities. Many businesses choose to call New York home, offering residents steady employment.
- The City. New York City offers countless things to do. From museums to famous landmarks, to major sports teams, there is always something going on in the City that Never Sleeps. Many of the state’s residents regularly commute to the city for work. Thus, there is a strong rental market in the 5 boroughs and NYC’s suburbs.
- Market diversity. The real estate market in New York is highly diverse. Investors can choose from some of the most expensive real estate in the world or can purchase a small multifamily property in a suburban or rural community. Moreover, there are an enormous amount of properties to choose from in most price ranges.
The Best Places to Buy Investment Property in New York in 2022
Long Island City
Long Island City is a residential and commercial neighborhood located in western Queens, a borough of New York City. The city has experienced massive growth in recent years, with residents drawn to its waterfront parks, thriving arts community, and real estate that is more affordable than in nearby Manhattan. That being said, real estate in Long Island City is just as expensive as you will find in other Queens neighborhoods. But its rapid growth and appreciation offer investors more upside than in older neighborhoods.
As of March 2022, the median home sold price in Long Island City was $1.3 million, which represents an 11.7% year-over-year increase. And both residential and commercial rents are up significantly since COVID-19 restrictions have lifted and people have returned to work, increasing at rates that are 3x higher than the citywide average.
Otisville
Otisville is a village that is located in Orange County, New York. The village is home to just over 1,000 residents and is perhaps best known for being the site of both federal and state prisons. So, you are likely wondering why Otisville made our list of the best places to buy investment property in New York. For one, real estate in Otisville is very affordable when you consider that New York City is only about 90 minutes away. The median listing home price in Otisville is $299,000, but homes start as low as $78,000.
Second, properties in Otisville tend to be older and in need of repairs. This allows real estate investors to buy affordable properties and add tremendous value. Third, Otisville offers the highest cap rates for long-term rentals in New York state. All these factors and more make Otisville one of the best places to invest in multifamily properties in New York.
Rochester
Rochester is the county seat of Monroe County and is the 4th most populous city in New York after NYC, Buffalo, and Yonkers. More than 1 million people live in the Rochester metropolitan area which spans 6 different counties. The city is located on the southern shore of Lake Ontario in the western part of the state. Rochester offers many colleges and universities and was the birthplace of many large corporations, including Kodak, Western Union, and Xerox.
But in terms of real estate, investors have hundreds of single-family and multifamily properties to choose from at any given time. These properties range from as little as $10,000 up to $2.1 million. As of March 2022, the median sold home price was $167,500, a nearly 5% year-over-year increase. The red hot housing market has also contributed to strong demand in the rental market. Approximately 6 out of 10 residents rent their homes in the cities. The median rent in the city for a 3-bedroom home is $1,400 per month, offering investors excellent returns.
Mastic Beach
Mastic Beach is part of the Town of Brookhaven in Suffolk County on Long Island. Like many Long Island towns, Mastic Beach is relatively small with a total area of just 5.3 square miles. Almost 13,000 people live in Mastic Beach, drawn by beachfront living, access to public transportation, and property values that are lower than you will find elsewhere on Long Island.
As of March 2022, the median home sold price in Mastic Beach was $285,000, representing a 13% year-over-year increase. Like Otisville, many of the homes in Mastic Beach are older and require remodeling, which again offers investors opportunities to add value. Investors also find the rental market appealing. Mastic Beach is ranked 4th Auction.com’s list of the places with the highest cap rate for short-term rentals in New York, due to tourists seeking beachfront living in the summer months.
Summary
There are many reasons why buying investment property in New York is a good idea. The state has a solid economy, anchored by New York City which accounts for 10% of New York’s GDP. New York City offers residents many things to do and see and solid employment opportunities. Outside of the city, New York is full of great investment properties in many different locales and price points. In this article, we identified 4 that we consider to be the best places to buy investment property in New York in 2022.
West Forest Capital is among the top hard money lenders New York. We have worked with investors throughout the state to secure financing and realize their investment goals. As one of the top hard money lenders New York, we offer many financing options for the purchase and refinance of non-owner-occupied properties. To learn more about our loan programs or to discuss a potential deal, contact a member of our team today.
