Best area for rental property within 40 minutes of Boston?

15 Replies

I am looking into buying a rental property in the Boston area (it does not need to actually be in Boston) but I want to be able to rent to students and young professionals, as I plan to do a micro-unit, coliving type arrangement, and they will be my target market. I would love to get suggestions on what the best areas could be to look for a house with 3+ bedrooms (ideally much more), in the 500,000 range, that would be a high demand rental market, and of course walking distance to the train. 

@Marielle Walter   $500,000 won't buy *anything* in the Boston market, even if it's engulfed in flames.  

Even in run down parts of town - which are quickly gentrifying - you're looking at $600,000+ for a wreck.  3-plexes are hitting the market at about $1.8M in places like JP, South Boston and East Boston.  

Cambridge is even worse - there's a 22-plex on the market for $17M ($1.29M per unit) and 3-plexes are $2.22M and duplexes are selling north of $1M.

Right now, Boston (all areas) has 51 3-plexes on the market. Prices range from $546,000 in Dorchester (REO, frozen pipes/rehab) to $5.9M (Charlestown).

I took a look to the suburbs.  For example, Bridgewater (Bridgewater State University) had two duplexes sold recently at $542,000 and $575,000 - still over your budget.

I think you're going to have to raise your spend or consider another area.

@Charlie MacPherson   Thanks. I would be comfortable with 550 k. I'll check out Bridgewater. I actually have seen several large homes for sale in Dorchester for a bit over 500 k, but looks like crime can be an issue. I am not pressed to buy in Boston - of course the market is very pricey there. I am more interested in surrounding areas that have strong rental markets, where folks can still commute into Boston by train. 

Marielle, 

Take a peek at what is near public transportation. While Bridgewater may be cheaper than areas closer to Boston, getting into Boston from there will be tough. 

There are a ton of decent options in Dorchester (five Red Line MBTA stops) and while I've been in that one foreclosure that Charlie mentioned and it is a wreck, you can get plenty of places that still have positive cash flow.

David

@David Cahill Thanks so much! I have seen a bunch in Dorchester, I have also seen in other places like Malden a half a mile to the train - seems like a good bet? Homes not updated but in turn key condition, perfect for me. But I am unsure of the rental market for young professionals there - do you know where i can find more info on that?

@Marielle Walter , tough to say! I would predict that the areas with smaller units (1-2 bedrooms) would cater more to young professionals the most. I think South Boston, South End and Back Bay would be ideal for this. Secondary would be Allston/Brighton. The "problem" is that the returns are less than something that is 3-4 bedroom and caters to families and tenants with subsidies. It depends on your risk tolerance, really. 

David

@Jonathan Bowen thanks that is super helpful info. Sounds like i will be capped at renting 4 rooms. However, does this apply to all surrounding areas (Dorchester, Roxbury, etc.). I wonder how the soon to be micro-unit got approved - i guess you have to go from 4 rooms to a full on apartment building to get the permission? Any idea how one takes that step?

@Marielle Walter Yes. The neighborhoods of Boston include Allston, Brighton, Dorchester, East Boston, Hyde Park, Jamaica Plain, Mattapan, Roslindale, Roxbury, South Boston and West Roxbury. There are neighborhoods within neighborhoods... I know some micro-units are being built now but there aren't many to buy and, on a per square foot basis, they're extremely expensive.

@Marielle Walter as stated above, Boston and the closely surrounding areas are VERY competitive right now - $5-600k will be tough (factor in your renovations after purchasing too). 

I'm in the Norwood area (with 3 commuter rail stops on the Franklin T Line) and $5-6 might buy you a smaller/older multi with 2-3 units.

I would highly recommend you explore the Franklin area (Also on the Franklin T Line) as property prices are lower, there is a bustling down town, there is a growing college and there are is a large office park. Seems like it could be a slam dunk for your business model. 

Good luck and don't hesitate to reach out if I can be of any more help. 

Check out my hometown of Watertown :) lots of expansion/gentrification going on there. Also has a transfer hub for the T. About a 20-30 bus ride to Boston/Harvard Sq
@Marielle Walter I’m not sure how apprised some of the people on this forum are but as a RE professional and active investor, I find what your goals are to be quite achievable. While to be Boston proper you are looking at some areas that are $1000/square feet you can find a lot of value in some metro areas such as Roslindale - 2 family with 5/6 beds can go for 5-600k in fair to good condition and that’s a nice middle ground location. Alternatively, my more specific is Malden and Everett which has direct access to trains and buses and you can find 2 families for the same price range and an occasional three family with work needed. Some areas that I would advise you to refrain from is Fenway, Alton/Brighton, Jamaica Plain and Back Bay. They are geographically the best locations for college students but they are incredibly saturated with rentals and prices are through the roof - 400k/ unit for 2 beds. I’m not trying to discount their desirability as rentals but you’re ultimately in this to make money right? The metro areas give you more bang for your buck while still able to appreciate at an increasing rate. I would discourage you from buying condos as they’re typically really High in HOA fees which is completely outside your control (major negative) and usually not investor friendly. They have a lot of restrictions with rental vs. owner occupied and tend to be more competitive in the Boston market as they’re more price friendly for a first time home buyer. Wishing you the best of luck and please message me with questions. I hope this has helped some!

@Lien Vuong you are totally speaking my language :) I'll message you - would like to chat more if you are open to it. I have considered Malden and Everette, but have not explored them much yet. Would love to pick your brain about potential for a small scale micro-unit concept I have also.