I'm looking to purchase some small rental property out in Connecticut, Possibly Hartford , and I would like to know if anyone has dealt with this area and what I should be expecting. Also, if there are any other area i should be looking into. Appreciate any assistance.
Hey David, there are lots of people on here that invest in CT. I'm not in the Hartford area, but @Scott Hollister hosts a meetup in Manchester. There are definitely places to buy to make money in CT. You need to make sure you do research on investment areas and learn from other people's mistakes so you don't make your own. Feel free to ask me any questions you have and I can give you what I know.
Welcome. As a relatively new investor in Hartford, I feel the need to caution people, but as long as you're aware that it is hands on, every day involved kind of investment you could be fine. If you're not planning to self manage you need to have a PM lined up first, because no one I know is willing to manage in Hartford
@Shirley R. Thank you for the comment. I myself am trying to look in CT to invest. What do you mean by every day involvement? Are you talking in terms of renovating the property or being involved with the tenant complaints?
If you are talking in terms of the tenant complaints, why are you so hands on everyday? What is your usually tenant call sound like and what are you experiences being a landlord thus far? Thank you in advance.
It is all of the above. I don't have 1 tenant. And obviously it's not every single day. However, c or d class tenants require a lot of hand holding. Personally coming to pick up the rent in cash, cause they don't bank. The washer broke. The mice. The upstairs tenant annoyed the downstairs tenant. A couch left on the street. The toilet. The key broke. The tenant wants out middle of the lease, but doesn't realize they will have to pay rent till another tenant moves in. Showing vacant apartments, supervising contractors, section 8 inspection, section 8 tenant destruction, new section 8 tenant paperwork.
How much time you got?
@Mo Farraj There's more: the tenant died. His wife and 3 kids left abruptly and turned off the heat and the middle of a cold snap. Can you guess what happened to the newly renovated apartment underneath? The city wants me to build a third staircase to the 3rd fl. The tenant on that 3rd fl was vacated by the city for that reason and left all her crap. It's not a full time job, but it's not Etrade either
@Shirley R. Jesus I feel your pain. Have you looked into hiring a PM? Also, why did you choose to get into c-d neighborhoods? Reading other posts by members, seems like more of a headache than anything else. Though the deals might be a cheaper to buy - seems like a more expensive laundry list of expenses down the line.
Thank you @Mat O'Grady and @Shirley Rozenshteyn for the information. I had spoken to a PM out there and they told me to avoid the north part of Hartford and focus on properties in the South End. Less of a headache. @Shirley Rozenshteyn even with the headaches do you feel it can be a worthy move and is the income suffecient?
@Mo Farraj It is a lot, but that's my job and I'm okay with it. Hartford is all c-d class. It's a learning experience and as my mom used to say, as long as the mortgage, taxes and insurance are covered by the rents - you're building wealth.
@David Saget so far (1 year) the maintenance is eating most of the cash flow, but I think it will get better with time and experience. I would recommend people buy newer homes, but around these parts it's hard to find. There's some on the north end, but that's a whole other animal to stay away from...
@Shirley Rozenshteyn I generally believe my first 2 years will go into repairs and upgrades. Especially since I like to try and maintain a higher quality of life for my tenants. Ive never heard of a town requiring 3 exits. That sucks majorly. I don't touch Hartford though. I feel like more are f class than anything in that area. Very few of what I'd call C.
@Jason Arcuri . Makes sense, takes 1-2 years to stabilize, especially the dumps in Hartford if you want to upgrade the conditions. Regarding the egresses, the city doesn't require 3, but the existing 2 were both in the back, so they wanted egress in the front...
@Shirley R. Very true I have a few multi's in Waterbury CT and that's sounds about right the properties are Very cheap but It comes with a cost
South End and West End of Hartford are okay. Definitely avoid North Hartford. Try to avoid 3 bed+ units as most likely you will get sec 8 tenants. I only have 1 or 2 bedrooms in Hartford and able to get market rent tenants, which are much better.
@David Saget we should connect I’m moving there also. Don’t know much but one thing everyone is saying is to stay out of Hartford. :(
@Shirley R. thanks for all your input. Now I know for sure Hartford is not a place to start for me. It would be nice to connect. I'm moving to Connecticut and looking for a place to BRRRR duplex/triplex in an nice area.
@Shirley R. moving to Connecticut, can you elaborate on the north end headaches?
@Edward Liu thank you for that advice, very helpful.
North end I would classify as F class. Tenants hoarding. Leaving trash everywhere on the property. Unfortunately there's a ghetto mentality there that people can't break out off. Some say it is dangerous in the north end, but I don't feel unsafe. I think being a tiny woman helps with that, cause no one sees me as a threat. However, I never wear my jewelry when I work. I lock the car and keep minimal cash. When a tenant pays cash I go straight to the bank. I don't "hang out". I do what I need to and go. Going back, I might not buy in the north end, but only because I don't see it appreciating ever. I don't think the everyday headaches are that different than on the south end.
One tip that has worked well for us is using the Trulia crime maps to determine the areas to stay away from in Bridgeport, Hartford, Waterbury, etc.
The numbers may look great on paper but ensuring you can actually achieve them is sometimes a challenge!
I own investments in the area and our company manages for others as well. Feel free to reach out!
Taxes are volatile in CT, especially in Hartford. Many municipalities are broke, so you're subject to hefty tax increases every 5 years. Make sure to look up when the revaluation is so you're not caught off guard.
The problem with Hartford, besides the crime in certain areas, is the rents have barely increased in 15 years yet the taxes have skyrocketed. That's a one-way train to losing money if you're not very careful.
Tax and rent increase are related to location and type of property you buy. I have a condo-ized building in Hartford and its property tax is pretty low vs similar buildings I have in other cities outside of CT. From 2017 to now, rents for 2 bds has increased from around $800-825 per month to $900 per. I consider that healthy increase in rent for this period of time.
You can find good deals in Hartford with great cashflow, just need to know where to look and what to look for.
Need advice on property in waterbury. Is this a good deal?
10+ cap rate