Newbie investor to the rhode island area

[Chad J Abel]

Good afternoon. My name is CJ and I'm currently in the military in Florida. I'm going to be relocating to the Newport, Rhode Island area to retire. I plan to start investing in this area. Having never been to Rhode Island are there any suggestions on good market areas to get started in and maybe some areas to avoid? I appreciate any advise. Thank you.

[Anthony Thompson]

@Chad J Abel welcome to BP!

You asked about good and bad market areas. As @Lyndsey Daigneault said it really depends on your goals.

"Good" market areas such as the East Side of Providence tend to be lower risk and aggravation, but also much higher priced (lower returns).

"Bad" market areas, which a number of people might include South Providence and Olneyville in, tend to be much cheaper, so the returns are better - but properties in those areas also tend to be much more management intensive.

If you're going to be managing yourself, which is a very good way to get familiar with an area, I'd say stick within 1/2 hour (ideally 15-20 minutes) of wherever you're going to spend most of your time (home, if you'll be retired).

You'll find very quickly that before you know it, you'll probably develop the Rhode Island mindset of not wanting to drive too far, and it's just easier to stay on top of properties when they're closer by.

I'm much more familiar with properties in the Warwick/Coventry/West Warwick and north part of the state, so if you know you're going to be centered around Newport I'd suggest connecting with some people specifically around there.-

One I know of is @Alexander Zurn and I think @Hadi Bah is also in that area. And since you're already planning to connect with Lyndsey, she may know that area well or know people who do.

You could also attend a RIREIG meeting and ask around there - I know the founder of the group Rick got his start down in Newport.

You mentioned wanting to do real estate as your full time business. I don't know what kind of retirement income you'll have, but generally it's difficult to make a living from rental properties without really scaling up the number of units owned (well past the 20-30 unit mark).

I don't mean to dampen your enthusiasm, but I wouldn't assume a few single family rentals would provide enough income to live on, unless it's just extra money on top of a comfortable retirement income. In which case, I couldn't imagine a more enjoyable retirement hobby ;)

Prices in RI are certainly better than some other nearby markets (Boston :::ahem::: Boston), but some folks from Mass have realized that too and are also looking in our market. So prices have certainly risen and it's hard to find things in the 7%+ cap rate range, unless it's something off-market you find yourself. (I always say, the best deals are the ones you make yourself.)

Since you mentioned it, I'd definitely suggest planning to get your real estate salesperson's license as a good starting point. It will familiarize you with RI real estate laws, customs and transactions, and give you access to the MLS to do your own comps too of course. It will get you "out in the market" and possibly provide a little income as well.

That's not to say don't be an investor - I absolutely think you should pursue rentals once you develop a comfort level with the area - I just also think for your situation it might be a good synergy to also start off being an agent.

I hope this helps, and feel free to put me on your coffee list next year as well :)