Multifamilies in Vermont

[Aaron Leger]

Hello Biggerpockets. Just about to finish my second flip and want to start buying some multi units. I’ve been looking at Vermont and New Hampshire as my likely candidates (live in mass) and I was wondering what peoples experiences and thought on Vermont investing are. Yes, I’m aware it’s small and an agrarian economy. No, I don’t want apartments in Worcester or Boston lol. Okay go!!!  

[Cameron Stewart]

I live in Boston and invest in Keene, NH! It’s a perfect middle ground, where the rent/price ratio is very high, but the quality of the area is actually pretty decent

[Christian Ehlers]

Depends what you are looking for really, can’t say I know much about Vermont, but you can invest in areas for long term rentals in areas like Keene or Dover NH, or you can buy multi families by the seacoast that you Airbnb during the summer and rent to travel nurses in the winter months. 
Are you after cash flow right off the bat or more looking for appreciation? Different areas work best for different strategies here

[Lien Vuong]

I can't comment about Vermont but my experiences with NH were good (Concord/Manchester markets). It was about a decade ago when I purchased it but it has gained in appreciation but the tenant class has remained mostly the same (working class/gig workers) and the high taxes were really a killer in the state. 

[Aaron Leger]

Thanks for the replies everyone. Merrimack valley has been off my radar as the cost is now getting prohibitive. I dont want a 500k 3 family in manchester. Was curious about rent payment and tenant quality in Vermont and realistic rent price targets. Also when It comes to Vermont I’m avoiding chittenden county again due to cost restrictions. Keene is great wish I got in two years ago before everything almost doubled in price.  

[Cameron Stewart]

Yeah Keene has definitely shot up. I got 2 buildings in 2019 and 2020 that were like 18% caps, just ridiculous. Now most stuff is more fairly priced, but still some good deals, opportunity to add value.

Wish I could help you more with VT! Idk about rental markets besides Burlington, but the immediate Burlington area is pretty high priced. Recommendation would be to scour the areas you’re thinking about for property managers, interview them and ask questions about the rental market.

[Shane Moynihan]

Hi @Aaron Leger, I agree with @Cameron Stewart! I am an agent and investor in Keene, NH. I started investing in 2019 and just closed on my second building last week! Keene is a really good spot because the buy in price is reasonable and you can get pretty good rental rates. Then you also have the option of trying student housing with Keene State College, and a lot of those rooms go for $700 or so a month. The only negative I can say for Keene is the high property taxes, but if you work them into your numbers then no big deal! Let me know if I can be of any assistance always enjoy helping investors!

And I can't speak on VT too much, but I have heard that they are pretty strict with multifamily regulations where they have to like inspect your property every couple years or something. Not sure how true it is just have heard that. 

[Patrick Giblin]

Vermont is very unique-Burlington is obviously the large draw but cash flow is almost non existent. The valuations the past 2 years have been absolutely nuts. Multi families up here are usually at least 100 years old and in very rough condition (see college rentals) but with such limited supply landlords can get away with neglecting buildings until they are nearly falling over

Prices are starting to come down with increase rates but they still don't pencil in my experience. 

[Aaron Montague]

@Aaron Leger

I had 3 places in Rutland, VT for most of a decade. Tough tenants though high rents relative to building price.

My buddy has a SFH renovation turned rental in Rutland that he'll be into for about 140k and should rent for $1800-2000 per month.

Vermont's housing is old. 100 years+ is standard just about everywhere. Budget sizeable Cap Ex savings every months when doing your calculations and you'll do well up there.

[Kate Barry]

Hi there!   I am a MF Investor, property manager, and it's one of my specialities as a Realtor in Southern VT & NH.  I'd be happy to talk to you more about the pros and cons of investing here and I also host a real estate meet up every month in Brattleboro VT. 

One thing to note about the MF industry here, at least in Southern Vermont, is that you have to deal with very very old properties.  Most of the MFs were built circa 1900, and another thing to consider is that Vermont has no building codes.  Many towns don't even have Zoning - where I live and work, many of the towns you don't have to even pull a permit unless you're working on the septic system.  When investing in VT & NH I think the best strategy is the long game, buy and hold, because if you are trying to flip it can be very very difficult unless you are able to do the work yourself, and do the work quickly.  

A huge plus for our area is that rental demand is very high and inventory is very very low. So you will not experience vacancies and if you can provide a really nice property you can charge top of market value very easily. There is also the benefit of having the demand for multiple types of rentals - long term, short term & midterm. Vermont's main industry is tourism, so sometimes you can find a property that actually functions better as a STR. And you will find very little regulation and government restrictions as compared to doing this in other states, like Massachusetts!

[Chris Seveney]

@Aaron Leger

I have 3 in the Rutland area- all 4 units. May consider selling

[Jonathan Bombaci]

When I was investing in Littleton NH I looked at property in St. johnsbury but never actually invested into VT. I found it confusing how properties less than 10 miles apart had very different rents and expenses when crossing the boarder. I couldn’t get comfortable with VT and like the tenant/landlord laws in NH. We own a little over 250 units in NH now and are investing along RT 16 outside of Portsmouth. We recently added a couple of 3 families to the portfolio for less than $375k each and rents are pretty strong. 

[Rich Hupper]

I have a question about building new multi families in new Hampshire. I am trying to find land to build a 2 unit condex. 80x59 footprint.  I am looking in Hillsborough and Rockingham counties. Are the cities prohibitive about this style home or is it a matter of acreage? Anyone building up there or work with builders? Id really like to start cold calling land owners up there and find a developable lot. Just not sure if I need to stay in certain zoning districts or if I can build anywhere.