Best Towns/Cities to Invest in MA?

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Lior Rozhansky
Real Estate Agent · Boston, MA · Member since 2016 · 106 posts · 69 votes
9y

Hey Daniel, I'm on the hunt for areas where I see sustainable economic drivers. Obviously Boston as a whole is one of the most diverse economic cities in the US, but I think finding the right pockets is essential. It's tricky here, because any area that's close to Boston that's not an A area is supposedly the "next Somerville", so I think it's really important to understand what's driving your market. My buy and hold is in Everett. No, I don't know if the Casino will explode the real estate values in the city. But what I saw was that it will create close to 3,000 new jobs in the area. Those 3,000 jobs translate to tenants in search of nearby housing. So regardless of what the value of homes may be, my units will always be in demand. I think there are other pockets of opportunity like that in eastern Mass. 

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  • David Mugwe
    Member since 2018 · 4 posts · 3 votes
    8y

    New here!. Love this thread!

    3Reply
  • Aidan McCarthy
    Rental Property Investor · Boston, MA · Member since 2019 · 1 post · 0 votes
    7y

    I'd be interested to see what opinions are out there now about the current state of the market in MA. Seems that the general consensus was that the market was at its limits a few years back, but it doesn't seem to have slowed down. 

    Still looking like Everett, Revere, Eastie etc. are growing crazy fast.

    0Reply
  • Nicholas Messinese
    MA · Member since 2019 · 2 posts · 2 votes
    7y

    Hi Everyone,

    I'm looking to get into the buy rehab and rent market. How does everyone choose a town or market to invest in? I'm a data analyst and I'm analyzing towns such as Watertown, in the image, to look for regional values and ARV potential. I do plan on speaking more with Realtors to follow up on my findings. But what are the tried and true methods? Word-of-mouth? Networking? Auctions?

    Thanks

    Nick

    2Reply
  • Xiaowen Yang
    Investor · Belmont, MA · Member since 2015 · 4 posts · 1 vote
    7y

    Hi Nick. 

    I happen to be a data analyst too.  We picked district by job growth rate and so on. Do you want to meet and have a cup of coffee together? 

    In terms of finding realtors, our experience is working with the top agent will save you money. But you have to define "top". We analyzed MLS data and calculated the adjusted negotiation power. So far we are very happy for our buyings.

    Best,

    Xiaowen

    1Reply
  • Craig Herrmann
    New to Real Estate · Gloucester, MA · Member since 2019 · 20 posts · 5 votes
    7y

    I just found this post and like what people are talking about. I live on the north shore but finding more potential deals in NH. I'd love to invest in my backyard, but I think that might be down the road.

    1Reply
  • Sally Carroll
    Member since 2019 · 1 post · 1 vote
    7y

    Daniel Ortiz and others in the Andover area, I just discovered Cafe Nero a couple of weeks ago!  I would like to meet up with people who wants to chat about real estate investment ideas. 

    1Reply
  • Jossi S.
    Rental Property Investor · Malden, MA · Member since 2015 · 11 posts · 7 votes
    7y

    Hi Everybody, 

    Adding on to this older thread, since it seems like a great place to compile these questions. 

    Does anyone have experience in Lawrence? It still looks like it would cash flow on paper, but I know it has its challenges and it would be great to get some insights from folks who've actively invested there. The downtown area looks like it has tons of potential, but it always seemed strangely empty whenever I was there.

    0Reply
  • Valentina G.
    Member since 2019 · 2 posts · 0 votes
    7y

    Hello,

    Really like this thread as it feels close to home :).

    Has any of you purchased a multifamily without providing cash flow? Meaning the place pays itself or some extra cash out of pocket might be needed. 

    0Reply
  • Zach Weinberg
    Boston · Member since 2019 · 3 posts · 0 votes
    7y

    Hey everyone, what do people here think about opportunities in Western MA? I would assume areas around the major colleges would have great cash flow potential.

    0Reply
  • Anna Windsor
    Member since 2019 · 1 post · 2 votes
    6y

    Hi All - tagging on to this thread... from almost 2 years ago.. what are some great MA communities to invest in now at the end of 2019? what factors to consider for these communities? Any advice.. newbie getting into real estate investment and trying to educate myself.

    2Reply
  • Chris Munichiello
    Weymouth, MA · Member since 2018 · 18 posts · 3 votes
    6y

    Weymouth 

    0Reply
  • Stephnie Igharosa
    Member since 2019 · 6 posts · 0 votes
    6y

     Folks on this thread keep saying “the new Somerville.” Forgive me for my ignorance, but what does that mean? 

    0Reply
  • Joseph DeCola
    Homeowner · Malden, MA · Member since 2017 · 12 posts · 12 votes
    6y

    @Stephanie Somerville was an urban city that had lower property values up until about 2012. Around that time, the median home price was around $360k and now in 2019 it is $720k.  In approximately one decade, the city underwent a lot of gentrification.  Investment into the city went way up and it became a super desirable place to live, dine, be a member of the community etc. Somerville is popular with young professionals and students and is essentially an extension of Cambridge now.  Before its recent development it was more of a class C neighborhood, give or take.

    0Reply
  • Art Perkitny
    Specialist · Cleveland, OH · Member since 2018 · 232 posts · 348 votes
    6y

    Hey @Anna Windsor, it's difficult to say which MA city is best to invest in for you without more information. Mainly, are you looking for a cash flow, appreciation or hybrid investment.

    Based on this determination it is easier to suggest locations to research.  

    Nonetheless I have included a resource below that I put together. Its a spreadsheet that lists all incorporated places in MA with populations over 10k. For each place I have included population, home value and rent figures, as well as the 5 year change for each of these. The last column shows the rent to price ratio (1% rule). 

    If you want more cashflow, I would optimize for the highest rent to price. If appreciation is what you're after then consider places with high population growth. 

    The color scale corresponds to the values for each respective metrics and indicated the desirability (green is better, red is worse)  

    Link to MA Cities Spreadsheet

    Hope this helps! 

    2Reply
  • Kevin Sullivan
    Homeowner · Southborough, MA · Member since 2016 · 7 posts · 0 votes
    6y

    Has anyone had any luck with multi's in Fitchburg or Leominster? I suppose a good deal with cash flow is good anytime/anywhere but what about appreciation over time...I imagine finding a multi near Fitchburg State would be ideal but wonder if one can expect any kind of appreciation 10-15 years down the road in this area 

    0Reply
  • Brian LucierPro Member
    Property Manager · Fitchburg, MA · Member since 2012 · 148 posts · 201 votes
    6y

    Hi Kevin,

    Man, you look just like Tom Brady!

    We are smack dab in the middle of this market and have seen the good the bad and the ugly. As in all markets, you need to know the neighborhoods. One street might be great, then right around the corner, not so much. We also see a lot of opportunities in the Gardner MA market too. Most recently, we have seen some growth in the Athol markets also. Prices for entry are great, rents are rising, but jobs and population still need to cover some ground to be sustainable. This neck of the woods is mostly all about cash flow, and long time buy and hold strategies. It has worked out well for us in our 19+ years. We own a lot of "doors" and mange for about 40+ more landlord clients.

    So about that appreciation...

    If you are familiar with the traffic reports in MA then you know the heart of Boston proper and the concentric rings of Interstate 128/95, and 495. Right now, the market has been booming for the past 10 years+ and rents have been soaring to their peaks. This is great for the buy and hold cash flow crowd. But being so close to the top, there is not much room for appreciation.

    So think of it this way. Years ago in Boston, you would buy for appreciation. Prices were through the roof, but still property values went up creating equity. The debt/Income ratios were tight, but with property values rising, you could "flip" a multi-family property with some meat on the bone and still have a payday on a sale or refinance.

    On the 128/95 ring around the city you would need to shop the markets where you might find some hidden gems. It was possible to find appreciation, AND with the rising rents that have been going up, you could have your cake and eat it too! Cash flow from rising rents, AND market appreciation. You could find the same scenarios out the the 495 ring around the city but the market trends were more towards cash flow than appreciation.

    Then, once you hit the Leominster/Fitchburg markets, you are mostly buying for cash flow. It all depends on your investing strategy. You could ask 10 investors how they invest in the market and get 11 different answers. The great thing about this market is the spread. You can enter into a property for a lot less cash down and see a wider spread in the per door cashflow margins. We have seen some of our investors realize $300 to $500 per door net profit on a 3 family building (in a great neighborhood). And then there are war zones (like in every market) where it doesn't make sense to buy the cheap property because you cannot change the neighborhood.

    Choose your investment strategy wisely

    So, you need to think about where you are in your investing cycle, then match that up to the market cycle. In the Northern Worcester County Market, younger investors have a lot more time to gain appreciation while enjoying healthy cash flow. But the appreciation will take more time. If you are young, and can buy with lower cash amounts, that could be a plan for building wealth. More seasoned investors with less time and more money could afford to do more profitable deals that may be out of reach at the moment for the newer breed of buyers. But guess what? That newer breed in time, becomes seasoned with more money and experience. 

    My suggestion? Just get started.

    7Reply
  • Kevin Sullivan
    Homeowner · Southborough, MA · Member since 2016 · 7 posts · 0 votes
    6y

    Hi Brian - thanks so much for your reply - very insightful...I will be copying/pasting and keeping in Word doc and reviewing daily...

    I think that is the key - getting started. I started with the money part first - and now I have my pre-approvals 

    Now I need the properties...

    TB12

    Once I find first property I suppose I will need to update my pic - perhaps Brady wearing a Charger uniform...or Raiders....or Titans...or Dolphins, Giants, Cowboys....or one of the other 20+ teams he is rumored to be heading

    0Reply
  • Brian LucierPro Member
    Property Manager · Fitchburg, MA · Member since 2012 · 148 posts · 201 votes
    6y
    Originally posted by @Kevin Sullivan:

    "Now I need the properties..."

    When you get ready, let us know. Be happy to be one of your core four if you are buying in this market. We scout out properties and neighborhoods all the time for our landlord investors. 

    Peace out...

    0Reply
  • Tamara Taylor
    Ayer, MA · Member since 2015 · 57 posts · 22 votes
    6y

    @Kevin Sullivan You will see minimal appreciation in Fitchburg but you can definitely cashflow with multi families, especially near Fitchburg State. And as always, screen tenants carefully. 

    0Reply
  • Connie Huo
    Real Estate Agent · Metrowest, MA · Member since 2020 · 3 posts · 1 vote
    6y

    @Kevin Sullivan 

    Hi Kevin, i do also live in Southborough and started doing investment property 3 years ago.

    After my first investment property in Worcester, it took me a long time to find the next good one. So in between that time, i've considered Fitchburg, because i guess it could never go wrong to get a house next to a university. I've checked out about 5 multi-families around Fitchburg, most of them around the campus. Here is how i feel about Fitchburg, as for cash flow, if it's near the campus, you GOT it. There's also nice place in other part of Fitchburg, but i have to say do not count on the appreciation. Downtown is in a pretty bad shape, plenty of empty shops and office space are up for leasing. People wandering on the street seems aimless. I've seen the similar situation in Worcester 8 years ago, but now it's a different place.

    According to the population data, it doesn't look good for Fitchburg. I'm guess this used-to-be factory town is continuing going downhill. Worcester on the other side, has good hospital, many colleges and university, some decent public school and with the new stadium finishing soon, I've witnessed how housing market changed in Worcester and it's all going to a bright direction. 

    0Reply
  • Zachary Herrera
    Investor · Somerville, MA · Member since 2020 · 2 posts · 0 votes
    6y

    Hi all,

    I just came across this forum in search of a good area to start researching to buy my first property. I am trying to get into REI and leaning towards the house hacking method (preferably duplex)then possibly BRRR. Wondering what others think of Lowell and or Methuen as areas to start my path? I have been searching for a couple of months and having issues finding positive cash flow properties in the Boston Metropolitan Area.

    Any pointers would be appreciated!

    0Reply
  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Zachary Herrera The Lowell/Methuen areas or other secondary markets will be the best candidate for house hack strategies because the prices are not as high as a Boston or metro Boston property and there's a smaller buy pool also. I see that you're from North Andover which doesnt have a lot of multi options but Lawrence (C class) would have some and certainly Methuen/Haverhill/Lowell would have the inventory for you. Those towns give you a large amount of multis to chose from as well as renter pool because demand is so high. I helped a client buy a house hack four family in Lawrence this past year with a very high cash/cash return. 

    Another area would be north shore in Beverly/Salem/Danvers with Salem having the highest number of multis with a niche community that is unique to the history of the city. 

    Good luck and hope this helps give you some insight!

    [email protected]
    The Elle Group5153 Reviews
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    2Reply
  • Zachary Herrera
    Investor · Somerville, MA · Member since 2020 · 2 posts · 0 votes
    6y

    @Lien Vuong Thank you for your insight! I was considering Lawrence/Haverhill areas as well but lower-class areas worry me for finding tenants, expenses, crime, etc. I would highly consider Lawrence as well as I see a lot of potential and high cash positive properties but doesn't seem to be developing as well as others? Would Lowell be considered class B?

    Thanks!

    0Reply
  • Lien VuongBusiness Member
    Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
    6y

    @Zachary Herrera some parts of Lowell are B but generally is B-. Lawrence is going to be a similar situation. Larger cities tend to be neighborhood by neighborhood. For example, Haverhill's Bradford would be the most desirable area and a whole different type of rental market than most of the city. 

    [email protected]
    The Elle Group5153 Reviews
    WebsiteView Page
    1Reply
  • Flavio Zanetti
    Investor · Andover, MA · Member since 2015 · 269 posts · 67 votes
    6y
    @Justin Silverio and @Daniel Ortiz, I live in Andover as well and invest in and around as well but prices have been really keeping me from increasing the portfolio here. The more I look, the more tempted I become to either go high end (reduce cash flow, problems, and increase appreciation), or cross the border into Nh and look into towns such as Nashua and Manchester.

    Great discussion!


    Originally posted by @Justin Silverio:

    @Daniel Ortiz Looks like we are in the same town!  I'm actually sitting at Cafe Nero as I type this.  

    I've invested in and around Andover for many years and have started developing in Boston. Over the years, I have focused more heavily on certain towns and lost focus on others. The intent was to start in low market towns to reduce my capital outset and get into a property to test the REI waters. Once I worked in that market for a while, I move up to mid-market areas. Then, after a while, I moved into the high end areas. This is ultimately where I wanted to be but my steps to get here were slow and methodical so I didn't take on too much risk and not understand the intricacies of the product that buyers are looking for.

    It really depends on your goals, what type of investment you want to get into and your appetite for risk.  Can you share more about your goals?

    0Reply
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