Identifying Profitable Cities

[Jamila Thompson]

Hello everyone, 

I am doing research prior to investing in my first rental property. I currently live in the NYC area, but my plan is to invest in either NJ or CT with a property in the 250K-350K range. Can anyone recommend any cities that I can look into? When identifying profitable cities, what factors do you look for? Are there any books or articles that you can recommend to aid my research? 

Thank you!

[Filipe Pereira]

Originally posted by @Jamila Thompson:

Hello everyone, 

I am doing research prior to investing in my first rental property. I currently live in the NYC area, but my plan is to invest in either NJ or CT with a property in the 250K-350K range. Can anyone recommend any cities that I can look into? When identifying profitable cities, what factors do you look for? Are there any books or articles that you can recommend to aid my research? 

Thank you!

Hi Jamila, 

We operate in North Central CT, and it's what I know best, so that's what I recommend. Anything along the I-91 corridor through Springfield MA has pockets that will cashflow. Whether or not they meet someone's standard of cashflow is a case by case basis, but we're still seeing properties listed on the MLS at about 1.3% (Gross rents / list price) - we're actually getting ready to list one next week.

Here's a list I put together some time ago that I believe is still relevant. This is by no means is an attempt to push anyone into any market, but rather just some generally vague thoughts.

Windsor is a great "small town" that generates good cashflow with moderate chances of appreciation (relative to the CT Market)

Granby even a smaller town feel than Windsor, rentals are in high demand and rent prices are high. Expect high prices too, though. Appreciation likely.

Enfield is better on cashflow, but has some rough parts of town that I personally avoid (Specifically T'ville). It does have a busy shopping area, and a mall that desperately needs attention. The proximity to MA is a benefit.

Manchester strong rents, but getting into the market can be tough, as multis are priced accordingly.

West Hartford if you're in this town you're probably banking on appreciation, not cashflow.

Glastonbury Strong rents, but expensive. Multis / rentals are not common, and in demand. Appreciation likely.

East Hartford Mostly a B/C class community. I like it. Rents are strong, proximity to downtown Hartford is a major plus. Prices have gone up steadily since 2015/2016.

New Britain Still has quite a negative stigma, mostly due to crime. I hear it all the time when I'm showing tenants units in other towns and I get asked "Do you have any other units available." You can see the expressions if you say "Yes we have one in New Britain." We manage in town, but I don't feel comfortable enough to purchase in NB myself. That being said, prices can be attractive.

Bristol Strong rental market. Seems to always have demand given proximity to Hartford, Waterbury and Meriden.

Fire away any questions that you may have - happy to answer anything we can.

Thanks!
Filipe