Recently, I was talking to a friend of mine, another real estate investor, who worked in Albany. He mentioned that he knew several people who were moving to my city, Binghamton, and thought that was remarkable. I told him that, while this may have been a surprising development 20 years ago, it didn’t shock me at all.
See, what I and other long-time real estate investment professionals in Binghamton know, is that this market is suddenly getting hot. Medium-to-long-term trends have been moving in a positive direction and they’ve been further quickened in the last year.
As someone specializing in investment property in Binghamton, NY, I know that this is a great market. The combination of supply and demand is in excellent balance—with opportunities for the smart investor in both directions. People want to move here and there are housing opportunities that can be converted into investment properties as a source of passive income.
People outside the area might be surprised by what’s happening in Binghamton. But they won’t be surprised for long. So if you’re thinking about investment property in Binghamton, NY, you might not want to leave it as a thought for too long.
Understanding the Possibilities of Investment Property
When most people think about real estate investing, they think about the “fix-and-flip” model, where you buy a house, fix it up, and sell it. That’s a good model, and one I’ve enjoyed and found to be very rewarding. But it’s far from the only one.
Investment properties are where you buy a house, do some work, and rent it out until you are ready to sell. There are a number of benefits to this. With a rental property, you have steady income without having to be actively buying and selling. That’s why we say that investing in residential real estate is a great way to generate passive income.
Of course, there are risks (and rewards) to being a landlord. If your place isn’t renting, you aren’t receiving income. You have to be sure you are following all local renter rights regulations, and have to either handle the upkeep on your own or pay someone to manage it.
So why do people choose to invest in rental properties? There are a few reasons. These can include:
- The market won’t return a great price for a sale at the moment
- You are in an area that has a high rate of rentals compared to ownership
- You are in an area that is transitioning and appreciating in value
These all have something in common: they speak to the fact that it may be better to rent out an investment property at the moment than to sell it. If you have a property in an area where people are renting now, and likely to buy in the future, it might be smart to hold onto it and wait for what comes next.
Few places are better examples of this phenomenon than Binghamton.
Why the Binghamton Investment Property Market is Hot
There are two crucial aspects of a rental market: well-positioned supply and growing demand. Binghamton has them both.
The Binghamton Housing Supply
The housing stock in Binghamton is rooted in its history. This was a very prosperous area for a long time. Our centrality between most of the major cities in upstate New York and eastern Pennsylvania led to the growth of a large tech sector (back in the days when that meant more manufacturing). There was wealth, and a lot of houses built.
In the ‘70s and ‘80s that started to decline, and to be honest, the city saw some rough days. A lot of houses started to become a little more dilapidated, and some even abandoned. The city saw population decline throughout the first decade of the 2000s, as unemployment and crime went up (even as the region remained pretty safe).
Vacancies went up. Older houses proliferated. As a city plan from the middle of the 2010s noted, less than 1% of the housing stock had been built after 2000. Many homes “lacked modern amenities.”
What does this mean? It means lower-priced homes. The average home price in the city is $101,000, with over 60% of the homes being less than $112,000 (and 11% less than $56,000). And that means an opportunity to buy houses at lower costs, do some repair, and rent them out.
But why will renting work? Because of the unique demand.
The Binghamton Rental Demand
So you know those tough times I mentioned earlier? Well, it wouldn’t be accurate to say they are entirely over, but they are improving. The university has helped lead a resurgence in healthcare and education fields, and jobs are coming back to Binghamton. The unemployment rate is still higher than in New York as a whole or the nation, but things are looking up.
And, in a way, that puts Binghamton right in the sweet spot.
See, there are more jobs here that are attracting younger, educated people. While some might be looking to buy right away, most people choose to rent. Indeed, right now, close to 60% of homes are used for rental.
That’s impacted rental rates. According to RentJungle, the average rental rates in December 2020 were as follows:
- 1-bedroom: $645 per month (a 5.27% decrease from last year)
- 2-bedroom: $984 per month (6.3% increase from last year)
What does this tell us? People are coming here looking for homes with more space in good areas.
That’s Binghamton—where there are historic neighborhoods and a burgeoning restaurant and cultural scene, despite the pandemic. Binghamton is attractive to people who want to make a change, but might not be ready to buy. This makes it a great place for investors in the rental market. You just have to be able to take advantage of it.
The Best Way to Find Investment Property in Binghamton NY
In a way, I got lucky. My career as a real estate investor in Binghamton started when the market wasn’t really very hot. I got by, did pretty well, and then I became an independently owned and operated HomeVestors® franchisee. That’s when things took off—right when the market started to turn the corner.
HomeVestors® gave me an unparalleled lead-generation tool. Their very well-known “We Buy Ugly Houses®” campaign meant that when people needed to sell, and sell fast, they contacted HomeVestors®. Then I received a lead who was already ready to sell. I just had to close the deal. Given how the Binghamton market is, and how many people are moving in, that kind of edge is nearly invaluable.
They also offer extensive training and peer-to-peer mentoring, which if you’re starting out, is really helpful. After all, this is a college town. We can all use a little bit of learning.
I’ve seen this market turn around. I’ve seen it go from residential to rental. And I’ve seen it turn into a truly hot rental market. If you want to see what comes next and be a part of it, request information about becoming a franchisee today.
Each franchise office is independently owned and operated.
HomeVestors of America® is the nation’s only real estate investing franchise, providing business opportunities to real estate and investment professionals across the nation.