Robust Rent Continues in Buffalo

Buffalo, in New York State on the border with Canada, is often overlooked by property investors. However, Buffalo is where the smart money is, because it provides a combination of factors unseen elsewhere in the USA.

Rock bottom prices and top rental yields

Buffalo offers incredibly low property prices, typically from £16,000 to £25,000. Prices are also relatively stable in Buffalo, with a steady climb of 3% to 4% per annum. More so, it has a history and culture of renting, with 70% of Buffalo residents being tenants as opposed to homeowners. Net rental yields in Buffalo range from 19% to 23% per annum.

This trend is due to Buffalo having seen a reversal of fortune since its height in 1900. Originating around 1789 as a small trading community, Buffalo rapidly expanded after the opening of the Erie Canal in 1825. It became a major railroad hub, the largest grain-milling centre in the country and home of the largest steel-making operation in the world.

When Buffalo's main trade and industry was rerouted and relocated in the later part of the 20th century, the city started its economic downturn.

Low unemployment and high tenant demand

Today, the median income is around half the average for the USA. However, the region's largest economic sectors, health care and education, continue to grow. This has been maintained by major expansions of the Buffalo Niagara Medical Campus and the University of Buffalo.

A June 2010 study of the area showed Buffalo's unemployment rate of 7.7% being lower than both the New York State and national averages. Forbes has also rated Buffalo as the 10th best place to raise a family. It is this combination of factors which underpins the massively high demand for rental property.

Robust Cash Flow and Recovery Play

Our Robust Cash Flow strategy is ideal for Buffalo. It has been especially designed for investors seeking an immediate, reliable, rental income, combined with steady growth. Medium term expectations are that you will be able to refinance at around 70% of valuation within 12 to 36 months (depending on Buffalo property market factors).

Location is critical in Buffalo and the following factors should always be considered:

   1. Correct pricing, too expensive and the rental yield falls.
   2. A reasonable city tax, as a high tax can deter residents.
   3. Good neighbourhoods with a strong community spirit.
   4. Convenient locations for transport, schools, work and amenities.
   5. Popular rental areas with continuous tenant demand.

Take Buffalo by the horns today!

With Axis, you can be assured we complete due diligence on your behalf. Our partners in Buffalo have been investing, renting, buying and selling property here for more than twenty years. We look after every stage of the investment process, providing a complete hands-off service.

So, take your portfolio by the horns and invest in Buffalo today.

To find out more about investing in Buffalo today, you can view available property and download the decision pack here or call our US portfolio manager Greg Glagow on our USA Hotline: 0333 444 1440.

Live with Abundance

Rod Thomas FCA  

Posted in Property in Buffalo

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