I am looking to purchase a 2-4 family rental unit in the New Haven area; something close to Yale. I was wondering what the area is like. I have read articles stating New Haven's historically low vacancy rate. How does one interpret the concomitant articles of high crime and poverty. The rents appear to be relatively high compared to the low real estate prices. How is it renting to college students? Do they usually rent for 9 months of the year? Section 8. Are there other factors to consider in this area? High taxes, poor municipality services, crime, ext? Any information on this area would be helpful.
If you are looking to invest in new haven there are a lot of things to consider. Are you targeting Yale or general public? Vacancy rates are low because demand for housing is very strong. New Haven has very distinct neighborhoods. Some of the best and worst neighborhoods in the city are literally adjacent to each other. This requires you to be very familiar with specific streets because it can be the difference between night and day from one street to the next. Most undergrads either live on campus or downtown in apt. buildings from what I can tell. Usually leases are 12 month terms. Many students living in the kind of home you are talking about are grad or PhD studentship and are in town year round. As I mentioned, demand is strong but there is a window when most of the Yale housing is renting and if you miss the window you could face some long vacancies or be forced to accept a lower rate. My advice would be to get very familiar with the city before you decide to purchase. There are a variety of different demographics and it's very important to understand the needs of each and what comes with each.
Hi! I've owned property in New Haven for 15 years, and what @Zachary Mowery states is spot on.
I've rented to Yale grad students and faculty, and now almost exclusively market to those affiliated with Yale. It's a great market.
However, New Haven neighborhoods are tricky. You definitely want to be familiar with them, or have someone with first-hand knowledge. Homes valued at close to $1,000,000 are (right) around the corner from houses worth less than $100 - 150 K. It's very tricky, like no where else I've seen.
You'll have significantly more luck if your property is in the East Rock or Westville sections, but again - even in these sections, there are exceptions to the rule. One of my properties borders Westville. I've found I need to mention "close to Westville" or "borders Westville" in order to get people to take a look. Once they come, they see an amazing house in a great area, but because they're told to only look for East Rock and Westville, they limit their searches...(Remember - most people coming to live here are coming for school, and might not have spent much time here at all. they're often relying on the advice of someone in the business office in the school or department they'll be attending.)
My final bit of advice relates to the housing window Zachary mentioned above. He is absolutely right! I found out about this the hard way! Long story, but I missed the window this year, and had to wait 3 months before finding a tenant (at $400 less/month!) In this case, I have made this lease end in May, so I will be "back on cycle" for June or July move-ins which are desired due to the academic cycle at Yale. If you're not rented by June or July, you'll likely be scrambling in August, Sept, Oct, unfortunately.
Good luck with your investment! Let us know if you have additional questions. If not, let us know how it turns out! ~Kevin
Thanks for the insightful and informative advice. So are neighborhoods like Dixwell or Beaver Hills or Fair Haven acceptable? I guess I'm wondering if this is a binary here; college grad students or Section 8 and the benefits/pitfalls of each group. Or is there a 'middle class' throughout New Haven where you can find a 'working class' demographic? Has anyone dealt with Section 8 and the bureaucracy involved in that?
I plan on getting something in the 100-150k range in a neighborhood outside East Rock or Westville. Any other guidance would be greatly appreciated!
@David T - The property I referred to in my post above is in Beaver Hills. It borders Westville. I hate to sound like a broken record, but it's tricky - some parts of Dixwell are scary - but Yale is investing heavily in that neighborhood, (two new residential colleges, sort of nearby...) so it could be up and coming. Parts of Beaver Hills are gorgeous. (My rental there is amazing!) but other parts, a few blocks away are not as safe.
I haven't directly dealt with Section 8, but i have family who has. It can be great (consistent paycheck which you can count on, jsome really great tenants, etc.) but it can be tricky too. I'm sure you've heard about nightmarish situations. if not, pull up a chair - I've heard some doosies. It certainly is tempting though, to get involved in the Dixwell area. There are many places that are a steal. It just takes the right personality to deal with some of the hassles of owning in low rent areas. It can be VERY lucrative, I know.
Areas like Fair Haven, Dixwell, and others will probably only attract low-rent and Section 8 tenants. Some can be great. But others can be very bad. Fair Haven heights has some nicer parts...but honestly it can be a street by street basis in any of the neighborhoods in New Haven. I've spent a lot of time here, and have friends who have invested here for the past 2 decades, so if you have questions about specific streets, let me know. I'm happy share whatever info I have. Good Luck!
I was wondering how your search went?
@Zachary Mowery & @Kevin B your comments above were very helpful to me, I have been walking and driving New Haven to get more familiar with the market. I mostly drove around Dixwell and I spent a lot of time in the area between Newhall and Winchester just bordering the science park. I plan to spend a bit more time in other areas. Then start focusing in on finding a property. I will most likely look for two family rentals.
I am moving to New Haven this summer and am looking to get into a couple of deals. First, I plan to purchase a multifamily for myself to live in, but I am also looking at apartment buildings in the area. I know that the tenant situations will be different for the properties, but I am in desperate need to speed up my knowledge on the area before I purchase the first property.
I am going to be in town on March 28th. I am not sure if any of you are willing to meet or plan a meet up, but I would be willing to pickup the tab for lunch if anyone is interested.
Looking forward to putting something together.
@John Hickey, you mention you've explored the Winchester/Science Park areas. I actually work in Science Park, so I'm sure you passed my building! (25 - corner of munson and Winchester st) That area is one of the most interesting in town! If you have questions about it, I'm happy to discuss! I've been working in that neighborhood for the last 7 years. Lots is happening there. (though it's still a tricky area.)
@Will Melton, I'm happy to meet up. Saturdays I've recently been heading up to MA to check in on a flip project in Amherst, but perhaps next week I can do that after meeting in New Haven.
@Kevin B. Yes I have passed your building! That is the area I really like although nothing in that exact area yet. I fully expected someone to say you are out of your mind JH that area is a war zone. Good to hear some optimism!
@Will Melton Most areas I am looking at are owner not occupant unless your a seasoned local. I would be open to looking at a more stable area in New Haven, good to know the market.
I've looked at a house on Starr between Winchester and Newhall two family @100k little pricey it's really beat up fully occupied. I'm waiting on rents and expenses. I'm not sure on that one. I'm in no rush with this one. The area is missing a few of the signs I look for when buying. I walk the area looking for vegan restaurants(I'm half vegan) granola bar type coffee shops, and artsy types walking around freely. Signs of major work being done on multiple houses and dumpsters everywhere in front yards in the area as a whole.
I do get that feeling near Munson and Winchester and also parts of Henry, did not see that on Starr. I also looked at a SF house on Lilac 80k off newhall, which seems a little further out of possibility.
One house that interests me is on Hallock(its on Fannie Mae needs 50k work) But I felt that area could come back also because it has the one thing the other areas don't. It has South Bronx in the seventies or Bed Stuy/Bushwick in the eighties style devastation. I think nothing makes an area come back quicker than it being such a warzone that even the hardened criminals feel the need to move on to have a little security. Then the artists come in followed at some point much later by mobs of yoga types pushing strollers.
I just looked at that house on Hallock it went under contract, during the first look phase.