The Capital Region is a two-family town. Rows of 19th-century brick and wood-frame flats in Albany, Troy and Schenectady give investors two or three rents under one roof at prices well below downstate. What trips people up is not the rent. It is the tax bill, the boiler and the city paperwork.
In short: LendingStreet makes DSCR loans on 1-8 unit rentals in Albany and across the Capital Region, qualified on the property's rent rather than W-2s or tax returns. Loans start at $150,000 with no stated maximum, purchases go up to 80% LTV and cash-out up to 75% LTV, the standard minimum DSCR is 1.0x and the minimum credit score is 620. LLC borrowers are standard.
Rental demand rests on state government, the University at Albany, Albany Medical Center, Rensselaer Polytechnic Institute in Troy, and the semiconductor and biotech employers north and east of the city. Tenants range from students and state workers to medical residents and young professionals.
In Albany, investors focus on Pine Hills, Center Square, the Hudson/Park area, Delaware Avenue and the neighborhoods near Washington Park. In Troy, Lansingburgh and the streets around downtown and RPI carry many two- and three-family homes. Schenectady's Stockade and the areas around Union College and the GE campus round out the core.
| Area | Typical stock | Tenant base |
|---|---|---|
| Pine Hills and the University area, Albany | Two-family flats, some single-family | Students, young professionals |
| Center Square and Hudson/Park, Albany | Brick rowhouses split into 2-3 units | State workers, professionals |
| Lansingburgh and downtown Troy | Two- and three-family wood frame | Workforce, RPI students |
| Colonie, Guilderland, Bethlehem | Single-family suburban homes | Families, long-term leases |
New York property taxes are high compared with most states, and in the Capital Region the bill usually comes in pieces: a county and city or town bill, and a separate school tax bill, often on different schedules. Add both when you estimate the payment.
Assessments in New York do not automatically reset when a property sells, but exemptions do. A seller who lived in the home may have had a STAR, senior or veteran exemption that ends with the sale. Ask for the full assessment and the tax amounts without exemptions.
This example is illustrative and not a quote. An investor buys a two-family in Pine Hills for $289,000. The units rent for $1,375 and $1,250, so qualifying rent is $2,625 a month. The seller's bills, with exemptions, total about $5,200 a year; without exemptions, the investor budgets about $7,900, or $658 a month. Insurance is $175.
At 80% LTV the loan is $231,200 and estimated principal and interest is about $1,615. On the seller's tax figure the payment would be about $2,223, a DSCR of 1.18x. On the realistic figure it is about $2,448, a DSCR of 1.07x. At 75% LTV the loan is $216,750 and DSCR rises to about 1.12x.
| Item | 80% LTV, seller taxes | 80% LTV, your taxes | 75% LTV, your taxes |
|---|---|---|---|
| Loan amount | $231,200 | $231,200 | $216,750 |
| Estimated principal and interest | $1,615 | $1,615 | $1,514 |
| Property and school taxes | $433 | $658 | $658 |
| Insurance | $175 | $175 | $175 |
| Total monthly payment | $2,223 | $2,448 | $2,347 |
| DSCR at $2,625 | 1.18x | 1.07x | 1.12x |
The City of Albany requires rental units to be registered and periodically inspected under its residential occupancy permit program, and Troy and Schenectady have their own rental registration rules. Check that a building's permits are current before you close, and budget for repairs an inspector may require.
New York's 2019 tenant protection law applies statewide: security deposits are generally capped at one month's rent, late fees are limited, and eviction procedures are strict. Albany has also had local good cause eviction rules in recent years, so confirm what currently applies to your building with a local attorney.
Most Capital Region rentals were built long before 1978, so lead-based paint rules apply, and New York has been adding lead inspection requirements for older rentals in some communities. Budget for lead-safe work practices on any turnover.
Heating is the other big item. Many two-families run on older gas boilers or steam systems, sometimes with one system for both units. Separate meters and heating systems make a building easier to rent and easier to insure.
Insurers in upstate New York look closely at roofs, heating systems and frozen-pipe risk. A vacant unit in January with the heat off is a claim waiting to happen, and many policies limit coverage on vacant property.
Clear sidewalks are the owner's responsibility in most of the region's cities, and snow removal is a real operating cost. It does not count in the DSCR payment on most programs, but it belongs in your budget.
Our investor loans are business-purpose loans on non-owner-occupied property: single-family homes, condos, two-, three- and four-family homes, and 5-8 unit buildings. Nine or more units is a commercial loan.
Short-term rentals qualify on projected revenue on some programs. Saratoga Springs sees strong seasonal demand around the summer racing season, but local rules on short-term rentals vary, so check with the city or town before you buy.
Upstate closings are usually handled by attorneys for each side, with a title company insuring the deal. Expect title insurance, recording fees and New York's mortgage recording tax, which applies to most mortgages and is often the largest single closing cost on a financed purchase.
The seller typically pays the state transfer tax on the deed. Ask your attorney for a full closing cost estimate early so it does not surprise you at the table.
See our New York DSCR page for statewide information. To get started, call (877) 298-1001 or use the form below with the address, rents, taxes and purchase price.
No. The loan qualifies on the property's rent compared with its full monthly payment. We check credit, with a 620 minimum, and reserves, but not W-2s, pay stubs or tax returns.
The seller may have had STAR, senior or veteran exemptions that end when the property sells. Budget on the full county, city or town, and school taxes without exemptions.
Yes. The City of Albany registers and inspects rental units under its residential occupancy permit program. Confirm the building's permit status and any open violations before you close.
Yes. Two-, three- and four-family homes qualify on the combined rent of all units, as long as the property is a non-owner-occupied rental.
The mortgage recording tax is the big one for borrowers. Attorney fees, title insurance and recording fees also apply. Sellers usually pay the state transfer tax.
Yes. LLC borrowers are standard on DSCR loans, and the members usually sign for the loan personally.
It can still qualify. The appraiser will note it, and it affects who pays for heat, which affects rent. Separate systems usually make a building easier to rent.
DSCR loans start at $150,000 with no stated maximum. Most Capital Region two-families at typical prices fit above that.
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