Cap rates 6.5–7.5% · Median price $175,000 · Median rent $1,000/mo · Population 250K
Buffalo offers some of the highest cap rates in New York State, with very low prices, a large university base (University at Buffalo), major healthcare employers, and a gentrifying downtown driven by Canalside development.
Here's what the numbers look like on a typical Buffalo rental at current market rates (20% down, 7.5% rate, standard expenses):
| Metric | As-Is (Current Rents) | Stabilized (Market Rents) |
|---|---|---|
| Purchase Price | $175,000 | $175,000 |
| Down Payment (20%) | $35,000 | $35,000 |
| Monthly Rent | $900 | $1,000 |
| Monthly Mortgage | $979 | $979 |
| Monthly OpEx (est 35%) | $315 | $350 |
| Est. Monthly Cash Flow | $-394/mo | $-329/mo |
| Cap Rate | 4.0% | 4.5% |
* Estimates only. Uses 20% down, 7.5% rate, 30yr term, 35% expense ratio, 5% vacancy. Run your own numbers with the calculator below.
Best for cash flow: Focus on workforce housing in established neighborhoods with strong employer anchors. Avoid chasing the highest raw yield numbers — the 10% cap rate in a declining neighborhood often means vacancy and management headaches that destroy returns.
Best for appreciation: Target neighborhoods within 2 miles of job centers, universities, or transit that are in the early stages of gentrification. Look for the coffee shop / yoga studio signal — amenities follow renters, and renters follow amenities.
Best for STR: Check local STR regulations carefully before investing. Some {name} neighborhoods have restrictions on short-term rentals.
DSCR Loans: Most Buffalo properties qualify for DSCR financing with a 1.0+ ratio. Use our DSCR Calculator to check qualification before making an offer.