I recently moved back to Rhode Island (Cumberland) from Boston and am extremely happy to be back. I am looking to purchase a triplex in the next 6-8 months. I have a small amount saved and want to save a little more for renovations and go in on something with 3.5% and brrr it.
A lot has changed here since I was a little kid with some areas getting better and some getting worse. I am having trouble pinpointing the quality of neighborhoods around me. I am extremely interested in Pawtucket - especially with Peregrine group’s development plans and acquisitions over the past few years in the area.
I think many areas will see some growth in coming years but am having trouble figuring out which would be best. I can look at employment statistics and labor all day and see that there has been some growth in median income year over year but nothing mind blowing. My problem is that I am not sure what metrics to look for. I can drive around the city on days off and see that there are significantly fewer grown men hanging out doing nothing during a work day in Pawtucket than there used to be, and a few new businesses and restaurants, but I am not sure what metrics would be most important to look at in order to really understand the towns I am looking at.
Does anyone have any suggestions on metrics I can look at that can help me understand the strength of the economic growth of a town? Or databases which I might use to find these data?
Or if anyone has any input on investing in Northern Rhode Island in general it would be much appreciated!
@Paul LaGrandeur it really depends on what scale you're looking at. If you're comparing Rhode Island to Boston, you'll probably find better value in RI, but probably fewer economic prospects. If you're comparing the Northeast to other areas of the country, you'd be insane to stay here in the Northeast if you had the ability to invest elsewhere.
I've found that in terms of indicators/metrics, you can quickly go down a rabbit hole because there are a ton of different indicators, from general economic to real estate specific.
So I've tried to take a step back and say, in the end it does come down to supply and demand. For supply, the Northeast and Rhode Island is still somewhat constrained in my opinion, as there's a good amount of anti-development sentiment here (and elsewhere of course, California is also notably horrible). So while I do think new supply is coming into the market, it seems to be at a steady trickle.
So I tend to focus a bit more on demand, and for that, mainly population (raw numbers of bodies) and employment (number of people able to pay rent or a mortgage). In neither case does Rhode Island look particularly great - compared to other areas of the country.
For specific data sources, on the supply side you can check the Census new home building permits list for the Providence-Warwick, RI-MA MSA. On the demand side there is of course the US Census data but that's often lagging so you might want to check with something more local such as the RI Division of Statewide Planning population projections 2010-2040. Similarly if you can find a local source for employment like the RI Dept of Labor & Training Current Employment Statistics that might be more recent and relevant than higher-level Federal data such as the Bureau of Economic Analysis.
Like I said, it's a bit of a rabbit hole so I try to stay focused on the basics of supply and demand.
@Anthony Thompson thank you for responding - I had seen your responses on other posts here and am excited to see that you responded to mine!
Essentially I am looking to subsidize my living situation and be able to move to another property. I’ll need to be in the northeast for work. I don’t think I could get something where the full mortgage could be covered.
My interest in economic prospects is to secure property within an area that qualified tenants will want to be in coming years. This is why I am looking more towards Pawtucket and not Woonsocket. Obviously I will do my due diligence to ensure tenants are qualified, but I feel that being in a better area would help to sustain good tenants and healthy rental values.
@Paul LaGrandeur your line of thinking echos what I have heard many others say, i.e. focusing on Pawtucket since it's closest to Boston and the T. The downside is that there's more competition, but the upside is that I think you'll hold your value reasonably well, as there's always demand for the area especially when RE gets hot again (as it is now).
I'd say, just make sure you're comfortable with the particular neighborhood in Pawtucket as there are many pocket neighborhoods in the city, some better, some worse. (The usual advice about checking a property/area out during the day, at night, and on the weekend applies.(
And I think you're right to avoid Woonsocket especially if you haven't owned rentals before. There are potential better values $/unit wise but at a much higher risk IMO. Woonsocket tends to shoot up when real estate is hot, but then plunges when it's not. If you're a tough landlord familiar with tough tenants and can commit to the long haul there, I think there's money to be made, but I don't recommend it for new investors.
I can't add much to Anthony's post but will say that I am big on Pawtucket over Woonsocket. Currently hold a bunch of properties there. We've been getting a number of tenants coming down from Boston for years. Like Providence I see differences street-by-street so driving the neighborhoods is key.
Do you have an opinion on the long term trajectory of Pawtucket? I think the negative effects of the Paw Sox loss are exaggerated.
Originally posted by @Paul LaGrandeur :
Do you have an opinion on the long term trajectory of Pawtucket? I think the negative effects of the Paw Sox loss are exaggerated.
I agree. I honestly don't think that the PawSox did much economically for the city. the average ball player was not living within city limits. Many people are eating at the game, not the local restaurants. I like it. It is the first city closest to Boston on the 95 corridor.
@Paul LaGrandeur Paul, welcome back. I’ll keep it brief, as I think Anthony gave a pretty great response!
Some areas that I have an EXTREMELY good feeling about are: Valley / Waterfire district providence. Valley Street area is really changing with co-working spaces and lofts. Pay close attention!! I think it will be the next west end. PC, Lasalle, and Mount Pleasant will always be solid.
Pawtucket will appreciate greatly as well, if you choose the right areas. I have a handful of buyers from Mass that I’ve helped close on their properties, and they picked Pawtucket due to it’s convenience for Boston employees (Amtrak).
You should also take advantage of RI Housing’s first time home buyer downpayment assistance program. (Not sure if you’re a first time buyer).
@Sam Albert I am a first time home buyer - looking into that now! Thank you so much for your input!
I was just in a co-working space on Valley St last week in fact. I think it will be interesting to watch whether that area is able to keep taking off if the economy slows or the market turns but for right now it does seem to have some promise.
As a Pawtucket resident and small multi-family investor, I’m a little worried about the long-term trajectory of Pawtucket if Hasbro, the city’s largest employer, decides to relocate elsewhere. Such a loss would be devastating to the local economy. Whether or not the toy company relocates, I’d still rather invest in Pawtucket over Woonsocket given its proximity to downtown Providence and Boston and soon-to-be built commuter rail station.
@Paul LaGrandeur where in RI would you prefer to live? I would suggest driving around the areas you would consider buying in and scope out the area, get a feel of the environment. Are you firm on Pawtucket? What about other cities/towns where there are serious rental shortage?
@Jenny Sayavong I would not say firm, but it would be most convenient to the territory in MA i work in. I think Lincoln, Cumberland and maybe some areas in providence could work as well.
@Paul LaGrandeur definitely explore all options... investing doesn’t have to be as complex as some like to make it out to be. If it feels right, the numbers work and you’ve done your research, go for it. There are different types of low or no money down programs out there for first time homebuyers, definitely take advantage of that!
Having properties in all of the cities and towns that you are discussing here, I can say that I have had both good and bad experiences in all of them. I would say that overall, everything is relative. The entry price in Woonsocket is less than Pawtucket but rents are a bit more affordable and I have nearly zero turnover. Pawtucket right now seems overpriced in my opinion as compared to when I bought a lot of my properties there. I personally am only buying there now when a specific deal is a steal. Given the higher rents that are collected, there is a bit more turnover given that many of the tenants transition to homeownership. We invest in a number of other towns in the area. Overall, a good deal on a property is a good deal. If managed properly, a property can perform with stability and adequate cash flow. We span from Narragansett to Woonsocket and literally every city and town in between at one point or another. If you find the right deal and operate it properly, the municipality is less of an issue as opposed to the specific neighborhood within that municipality.
I have no experience with Pawtucket but I have had good luck with Woonsocket for cash flow. I was actually surprised by how fast I could fill my apartments, even at the higher end of the rental range for the area, and even with relatively strict credit history/income requirements. The longest it has taken to fill a place has been a week. Yes, we get plenty of people applying that don't pass our requirements or are currently getting evicted, etc. but it is pretty easy to weed them out with a quick online pre-screening form and a check of the Rhode Island Judiciary website. I don't expect much appreciation from the house, however, and what others are saying about the long term market there may be true. I don't know because I haven't been there that long. I was only really interested in generating cash flow at this time, and hopefully rolling over the houses to someplace more desirable later. Just be careful which areas you buy in because some are much nicer than others.
@Brandon Ingegneri would you say in Woonsocket that you’ve had luck finding reliable tenants with your screening? Rent paid every month on time is all I want, I’ll work 100 hours a week if I have to to get started.
I know you’re right that it is the deal that matters. And I definitely think I can get a deal in Woonsocket, but as a new young landlord, everyone says I can still screw up a great deal in a tougher market, and I think there’s definitely some truth to that.
@Lisa Kattenhorn I guess I’m not looking for appreciation, I just want to be living in a house on the cheap and have the mortgage paid down, with a little bit of cash flow. I am an insurance adjuster, so I can deal with a broken pipe or a shredded roof, I am more afraid of evicting my neighbors every month. Hearing from you and Brandan makes me want to do another drive through. Any neighborhoods you think I should check out this week?
@Paul LaGrandeur currently, 20 of the units in my portfolio are located in Woonsocket. Of those 20 units, I have had one unit turn over in the last several years. Every single rent is paid on time, my tenants all keep everything neat and orderly, and they are among my least needy and least high maintenance tenants. I have never had an eviction take place.
Find a deal. Anywhere. Any city. Any town. Just be sure it’s in fact that, a deal. Not a transaction. Be diligent. Learn your market and refine your process. My portfolio spans the state. I have learned that each city and town has its own little idiosyncrasies that you’ll need to figure out and adapt to as you invest in each of them. None of those have anything that you can’t overcome when a property is dug out organically and purchased as a good deal.
@Paul LaGrandeur I have only had to evict one tenant in Woonsocket and that was a tenant that I inherited early on with a house I bought, not one that *I* put in place. A simple background check or eviction screen would have eliminated him from consideration for me, but the woman who owned the place before me was older and just trusted what he told her. To be honest, the eviction process was really not a major hassle in RI compared to how it might have been in MA or some other states. It was over in 2 months and I was kind of glad to get that experience out of the way so I wasn't afraid of it anymore. In fact, just about everything I was afraid of happened with that first house and it worked out in the end. Everyone else pays on time, if not early and are keeping the units cleaner than I keep my house.
If you aren't working with an agent already, I know someone who knows that area really well and could walk you through promising properties in Woonsocket and surrounding towns. Let me know and I will pass along his information. He is really great at finding deals. Otherwise, I think the closer you are to the N. Smithfield line, the better. Also, I think the northern side of town, along the MA border is also good, but I am less familiar with that area. Hope that helps!
@Lisa Kattenhorn thank you so much! I actually just asked my second question on MA vs RI eviction process and you answered that a bit here hahaha.
I’ll keep looking around and will keep your friend in mind thanks!