I have received inquiries about whether to manage properties directly or hire a management company. This was in the context of someone living far away and looking for investment properties in Buffalo. If we organize the items to check in order, they can be broadly divided into three categories: rental rates, property taxes, and management costs.

The average rent in Buffalo, as of July 2026, is reported to be between $1,420 and $1,431 per month, which is a 3.77 percent increase from the previous year. This is about 30 percent lower than the national average, making the initial purchase price less burdensome. Recent market data shows that 57 percent of households in Buffalo are renting, indicating a steady demand for rentals. However, there are variations depending on the type of property, with studios averaging $1,059 and three-bedroom units around $1,756, which should be noted.

The first item to check is the loan conditions. Investment properties typically require a higher down payment than primary residences, usually between 15 to 25 percent. A credit score of 620 or higher is needed to qualify for a loan, but a score above 740 is necessary to secure favorable interest rates. Interest rates are often set 0.5 to 0.75 percentage points higher than those for primary residences. During the loan assessment, only 75 percent of rental income is considered, which can result in tighter loan limits in a market like Buffalo where rental prices are lower.

The second item is property taxes. Since I couldn't directly check the tax rate for Erie County, which Buffalo is part of, I looked at the effective tax rate for Albany County in upstate New York, which is approximately 1.89 percent as of 2026. The actual tax rate can vary significantly by school district and municipality, so it's best to verify the exact rate for specific properties of interest through the Erie County Assessment Office.

• Check rental rates by property type
• Keep in mind that only 75 percent of rental income is considered in loan assessments
• Always verify property taxes directly through the Erie County Assessment Office
• Compare management fees with the time required for direct management

The third item is the management method. Buffalo and Erie County have not implemented rent stabilization measures. The New York State ETPA applies only to Nassau, Rockland, Westchester, and Ulster counties, so Buffalo is not included. However, common provisions from the 2019 Housing Stability and Tenant Protection Act, such as security deposit limits and notice periods, do apply in Buffalo. If managing tenants directly from a distance is challenging, hiring a management company is an option, with fees typically ranging from 8 to 12 percent of the monthly rent. In a market with lower rental rates, this fee percentage can significantly impact cash flow.

By factoring in landlord insurance and maintenance costs, which are typically around 1 percent of the property's value annually, it becomes much clearer to compare which management option—direct or outsourced—yields better returns. For long-distance investments, including management company fees in initial cash flow calculations can help avoid surprises later.

Ultimately, the investor who inquired chose to hire a management company. While the 8 to 12 percent fee may not seem large in a market with lower rental rates, it appeared to be a more reasonable choice compared to the time required to coordinate maintenance and handle tenant issues from afar. When deciding on a management method, it's important to consider not just the fee rate but also the time you can personally invest. Especially when starting investments in a market with lower rental rates, the losses incurred from making the wrong management choice early on can significantly impact overall returns.

This article is not investment or legal advice, and it is recommended to consult with real estate and tax professionals before entering into any contracts.