Geeater Boston Rental Property Market

Rental Property Investor · Waltham, MA · Member since 2019 · 3 posts · 4 votes

Does anyone have any intel on the Greater Boston Rental Market. I am looking to purchase my first rental investment property and I was hoping to get additional informaiton on which areas are “up and coming”. Additionally, I want to know whether now is a good time to buy an investment property or if I should wait, seeing that property values may have reached a short-term peak. Please let me know. Any advice is helpful. Thanks

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Charlie MacPherson

China, ME · Member since 2014 · 3k+ posts · 4k+ votes

@Randall McHugh On the macro level, Boston itself is well along the road of gentrification. Downtown, Beacon Hill, Charlestown, South End, JP, South Boston and East Boston are all at peak pricing.

In my opinion, Roxbury and Dorchester are catching up. Mattapan will be next.

As prices have been rising for many years, lots of people have been driven out in concentric circles. People have had to move farther away to find affordable pricing.

The exception is the Newton, Dover, Wellesley corridor where prices have been astronomical since time immemorial.

To the south, both Plymouth and Bristol counties (think south of Weymouth down to the Cape Cod Canal and west to I-95-ish) have much lower acquisition prices though they have lower rents than in Boston. I think Plymouth County is the sweet spot with a good balance between prices and rents.

Brockton is a good target, though there's a war zone in the center and somewhat to the east. West Brockton is actually very ice. The other towns to look at are Plymouth, Middleboro, Kingston and Pembroke.

To the north of Boston, Lawrence, Lowell and Lynn can have some rougher areas. I'd use the crime heat maps on Trulia to evaluate those.

I hope that helps.

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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
7y
@Randall McHugh On the macro level, Boston itself is well along the road of gentrification. Downtown, Beacon Hill, Charlestown, South End, JP, South Boston and East Boston are all at peak pricing.
In my opinion, Roxbury and Dorchester are catching up. Mattapan will be next.
As prices have been rising for many years, lots of people have been driven out in concentric circles. People have had to move farther away to find affordable pricing.
The exception is the Newton, Dover, Wellesley corridor where prices have been astronomical since time immemorial.
To the south, both Plymouth and Bristol counties (think south of Weymouth down to the Cape Cod Canal and west to I-95-ish) have much lower acquisition prices though they have lower rents than in Boston. I think Plymouth County is the sweet spot with a good balance between prices and rents.
Brockton is a good target, though there's a war zone in the center and somewhat to the east. West Brockton is actually very ice. The other towns to look at are Plymouth, Middleboro, Kingston and Pembroke.
To the north of Boston, Lawrence, Lowell and Lynn can have some rougher areas. I'd use the crime heat maps on Trulia to evaluate those.
I hope that helps.
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Randall McHugh
OP
Rental Property Investor · Waltham, MA · Member since 2019 · 3 posts · 4 votes
7y
@Charlie MacPherson
Yes that definitely helps. Do you have any opinion on the Allston / Brighton area? Have home prices here pretty much peaked? Also do you think there will always be steady rental demand in this area?
Thanks again for the help.
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Account Closed
Rental Property Investor · Boston, MA · Member since 2018 · 31 posts · 18 votes
7y
I'd add that Revere and Everett are both strong areas for investment as well. I feel like the ship has sailed for Allston / Brighton.
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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
7y
@Randall McHugh Yes - I'd include Allston / Brighton as being at peak pricing.
The only MFR on the market in Allston right now is a 4-plex at $2.55M. I don't know whether that will continue to appreciate, but you could probably buy 5 of those in Plymouth County for that price - or a spectacular home in Plymouth with an ocean view of Cape Cod and probably Portugal too!
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Jarrod Kohl
Boston, MA · Member since 2017 · 209 posts · 126 votes
7y
Originally posted by @Randall McHugh:
@Charlie MacPherson
Yes that definitely helps. Do you have any opinion on the Allston / Brighton area? Have home prices here pretty much peaked? Also do you think there will always be steady rental demand in this area?
Thanks again for the help.
Hi Randall,
There will almost always be a demand for housing in Allston, aside from the huge student population it also has a ton of Young professionals and a few other populations. The biggest issue (for you) is that many of the properties are owned by a few large landlords and they would probably not want to sell unless you were going to overpay.
I agree with @Charlie MacPherson with some of the other locations that he mentions, but if you have your heart set on Boston (Allston/Brighton/etc) you probably want to start looking now and plan on looking for a while. There has been the occasional deal that has popped up, but it will at best be a fixer upper or need something creative done. At worst you buy something without a great cap rate or cash return and hope fore appreciation, but with rents already high and new construction popping up in multiple parts of the city (Southie/Charlestown/Southendish) I think you would want to be very careful making a straight appreciation play in those parts.
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Charlie MacPherson
China, ME · Member since 2014 · 3k+ posts · 4k+ votes
7y
@Jarrod Kohl @Randall McHugh I think Jarrod is right. Buying in these hyper-hot markets is a matter of your personal risk tolerance.
As a general principle, I would prefer to take the same amount of money and buy more doors, simply because the risk of a professional tenant is spread out. I also don't think that the lower priced parts of the state will fall as hard as the expensive parts - but I definitely reserve the right to be wrong.
As to rental demand, Jarrod called it. Anywhere close to colleges will always be in high demand. College rentals bring their own risks and opportunities. BP has had a few really good podcasts on the topic. You might want to search the archive and listen.
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Randall McHugh
OP
Rental Property Investor · Waltham, MA · Member since 2019 · 3 posts · 4 votes
7y
Awesome. Very helpful guys. Thanks a lot!
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Philip Ganz
Lender · Fort Lauderdale · Member since 2017 · 190 posts · 117 votes
7y
@Randall McHugh Try Watertown.
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Michael Pallotta
Realtor · Boston, MA · Member since 2017 · 187 posts · 40 votes
7y
Hey @Randall McHugh, a lot of information has already been shared about some areas and I agree with Charlie and Jarrod mentioned. Prices are high but there are also some great opportunities depending on where you are looking and what your situation is. If you have some more specific questions or just want more info, I would be happy to explain more if I can.
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Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
7y
I think the towns that are a lot of people are targeting for increase appreciation is Chelsea and Lynn as there is an incredible amount of developments happening there in the next five years. Chelsea has the Silver Line and is getting close to 1000 units of new condos that have already been approved, Lynn has already OKed the plans to revitalize the old GE plant where they are building a mix use - Assembly Row style - complex that will be completed in approx 2021. Being able to piggy back on those developments and get those rents would be really smart.
Another Boston area that is very desirable would be Hyde Park and Roslindale where you're in the city but those areas have their own ecosystems and cultures that makes it very unique. They have the vibe of Jamaica Plain without the price ticket (for now).
I really like those areas for a 3-5 year growth plan. Overall they're sound for the crime rate metric and are commanding strong rents because of its access to the city and local amenities.
As for the market right now I agree with many of my peers in Watertown, Everett, Malden, Dorchester. They have less appreciation to go but their rental income is already so strong (commanding $1000/bedroom), that will off set some of the costs of your investment. You're also going to get A class tenants who are mostly professionals that do not want to commit to a property yet.
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Josue Velney
Developer · Boston, MA · Member since 2016 · 175 posts · 155 votes
7y
Hi @Randall McHugh, this is a great question!! I really enjoyed reading what other investors had to say on this topic. I believe Dorchester and Roxbury are up and coming. I just purchased a three family in Roxbury this month. The city has big plans for Roxbury. They are already saying the G word "gentrification"! Dorchester is not far behind Roxbury either. Mattapan is a sleeper too. If you are looking for a good deal do not look on MLS. All the great deals go for over asking in this hot market. I will see you at the top my friend.
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