New Hampshire or Massachusetts?

16 Replies

Hey BP,

I'm currently living in the North Shore area of Massachusetts and I'm trying to get some input on which state would be best for buy and hold. I grew up in southern NH and love the area but currently in MA due to work. My question is what's some pros and cons about investing in NH or MA?

Thanks for the help!

Rich V

Serious lack of inventory in Southern NH right now.  Whether that is a pro or a con depends on your strategy, of course.  I think people are going to make some nice money on spec builds this summer.  For a "rehab and rent" guy like me these are not times awash with possibilities.

@Richard Villandry  

You should consider attending several local REIA clubs and meetups in the area.

NH could be a good vacation rental market. Student Housing might also be a good niche.

Paul

Richard is right that there is a lack of inventory in Southern NH but it is as bad if not worse in Northern MA so that probably isn't a major factor between those 2 areas.

Prices will usually be a little higher in MA but the rents are too.  Though I don't think it scales so dollar for dollar NH is probably a little better on the ratios.  Property taxes are usually at a relatively higher rate, but usually on lower assessments. 

I'd say the 2 biggest factors are that MA is probably the most tenant friendly state in the country.  NH isn't any kind of landlord paradise but relatively speaking it is much better to be a LL up there.

Other factor is where do you actually live?  Says Derry so if you are still living in NH and just working in MA there is so advantage to investing in NH as you will not have to pay MA taxes on any profits.  Of course double edge sword if you have your properties set up to show a paper loss you can't take the losses either.  This is a bigger consideration if you were doing flips since you would in fact be paying LOTS of taxes on that income.

Oh last factor is if you are going to use an LLC to hold the properties you are paying $500/year minimum for the honor of having one in the Commonwealth where it is cheaper in NH (Not sure the number but pretty sure it is less than half that).

Shaun Reilly, Real Estate Agent in MA (#9517670)
1-800-774-0737

I'm pretty sure our LLCs are $100.  Maybe $120.

If I were willing to put in the time right now (which I am not, I have a day job that pays very well and I like it) I would be building a small (6-8 unit) townhouse development in a small town with a good school district in Hillsborough or Cheshire county.  Rockingham has gotten too expensive, and Merrimack county is too dependent on an overall good economy for me to be comfortable with it right now.

NH LLC = $100 to form and for annual reports.

I invest (flip/spec build) in Cheshire and western Hillsborough counties. I just sold a small (approx 1500 sq ft) spec house I funded in Peterborough. Took a bit of a haircut ($8K) to get rid of it, so we weren't holding it over the winter. Nice town, but a bit of a slog to sell to OO at a good price.

@Richard C.    How is the market in Hillsborough (town)?  Just got asked to fund a flip there by one of the investors I work with.

Just one question to ask if you are asked to fund something in Hillsborough.  

"Is the house in the Emerald Lake District?"

If "No", that is good.

If "I don't know" then you are dealing with someone who doesn't know anything about the town, and you should stay clear.

If "Yes" that is not an automatic deal killer, but evaluate very, very, very carefully.  Especially comps.

The ELD is a district in town that was intended to be a vacation/second home development.  They got broad exemptions from planning and zoning in exchange for (supposedly) providing most public services themselves.  Over time, it become essentially a trailer park, with a mix of trailers and small "chalet" style single families on very small lots and subject to extraordinary assessments for things like water and sewer work. They are always on the edge (or over the edge) of financial trouble, and they frankly have a pretty serious nepotism/conflict-of-interest thing going on with their management.

That is why there are $50,000 houses there, when a cheap house anywhere around there is 2 to 2.5 times that.

I live close-by and have a rental in Hillsborough.  If you want, I'll drive by for you if you want to send me the address.

Was your Peterborough house the one on Morris?  If so, I'm afraid it was a little overpriced from the beginning.  

@Richard C.  

Thanks Richard.  I knew about ELD.  As I remember, there was a building moratorium -- something about water shortage or sewer capacity..   The subject house isn't in ELD as I understand, but I'm probably going to pass on making the loan for other reasons having to do with the borrower's financial situation.  And thanks for the drive-by offer -- very nice of you!

@Shaun Reilly: I'm surprised to hear there is a lack of inventory in Southern NH. Are you also considering Nashua/Milford/Amherst/Merrimack area? 

Originally posted by @David Bennett :

@Shaun Reilly: I'm surprised to hear there is a lack of inventory in Southern NH. Are you also considering Nashua/Milford/Amherst/Merrimack area? 

Well there is ALWAYS inventory.

I think that there is a lack of quality inventory at prices that are even close to being in the ballpark of something that will work.

Sellers feel the market is still roaring and have things priced that way, and often get it so no reason to really pull back in a lot of places.  But most anything that is close to working will be in need of major repairs.

This is all generalization of course, but you aren't going to be plucking super deals off of MLS with little effort needed.

Shaun Reilly, Real Estate Agent in MA (#9517670)
1-800-774-0737

@Richard Villandry Welcome.

Since you spend time in both MA & NH I'd check out both areas. As my father used to say "To Avoid Disappointment Always Have an Alternative." I'm in Marblehead, Swampscott, Salem and occasionally Boston.

You ever read "Acres of Diamonds"?

@Richard Villandry

Essential

Originally posted by @Shaun Reilly :
Originally posted by @David Bennett:

@Shaun Reilly: I'm surprised to hear there is a lack of inventory in Southern NH. Are you also considering Nashua/Milford/Amherst/Merrimack area? 

Well there is ALWAYS inventory.

I think that there is a lack of quality inventory at prices that are even close to being in the ballpark of something that will work.

Sellers feel the market is still roaring and have things priced that way, and often get it so no reason to really pull back in a lot of places.  But most anything that is close to working will be in need of major repairs.

This is all generalization of course, but you aren't going to be plucking super deals off of MLS with little effort needed.

 There's not a lot of inventory, especially in the level one or two steps above entry level.  Professional class family homes. 

It has gotten so bad that some joker called MassHomeSale dot com keeps hammering our Craigslist :).

Originally posted by @Richard C. :

 There's not a lot of inventory, especially in the level one or two steps above entry level.  Professional class family homes. 

It has gotten so bad that some joker called MassHomeSale dot com keeps hammering our Craigslist :).

Not sure if posting 1 ad a day (and since I have 4 distinctly different ad templates you won't see the same one more than maybe twice in a week) counts are "hammering".

I guess I did have the audacity to post 2 totally different ads in one day a few days ago.  And one of them was admittedly not in the most appropriate section, but I was trying something different with that.

Of course somebody flagged it for removal...  ;p 

Shaun Reilly, Real Estate Agent in MA (#9517670)
1-800-774-0737

Wasn't me, I don't care what people post on Craigslist.

Evicting a tenant is a lot easier in NH: 4-5 weeks and $150-300.

In Mass, you may spent 6 months and $20K to do it.

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