I am looking into a pocket listing park that is not currently on the market in New York State. Wondering if anyone has experience in the state, ie. pros, cons, key things to look out for etc.?
Of course i will do my due diligence and am just starting the process but figured i would reach out to this audience for suggestions as well.
Valuations aside, I found property taxes to be the major issue making the math challenged. Others have an aversion because it’s a top 5 tenant-friendly state in the country, making evictions painful.
You aren’t kidding on the taxes. I just underwrote a park with a $107k expected gross income that has $27k in town/school taxes. That is for a little under 5 acres. Absolutely insane. It was only about 40% occupied so there was some upside there but they were not impressed with my offer…
We’ve owned a park in upstate NY for about a year now. Taxes are running around 18% of income for us ($75K taxes on $420K collected rents) and that seems to be about the norm in that area. Contrast that to some of our mid-western parks that are 5-10% of revenue. Ultimately taxes get priced in though. The real challenge we’ve had in NY are moving evictions along. The tenants know they have several months before they have to pay up so it becomes somewhat of a cat and mouse game with some tenants. Just plan on a solid 6 months before you can actually get anyone out of your park. We’ve recently introduced a cash for keys program with some success. We’re finding that avoiding the courtroom when possible is our best course in NY.
We’ve done all right with our NY park but the combination of a 5% late fee (state maximum) combined with the tenant-friendly laws and general business unfriendliness of the state has led us to stop looking at parks in NY.