Lowell, MA - Rental Market Outlook & Strategy

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Lowell, MA - Rental Market Outlook & Strategy

Jesse Cote
Rental Property Investor · Stratham, NH · Member since 2020 · 56 posts · 20 votes

Hello lovely Massachusetts residents,

I wanted to get some more information on the Lowell, MA rental market and surrounding areas. I have a friend going to UMass Lowell next spring that I may buy housing for. He could likely fill a home with other track athletes from his team (the boy can fly!).

I’m looking for any info about Lowell that I can get, I would like to understand the area well. I will probably drive around for a day sometime soon.

I’m also looking for anyone working with investors in the Lowell area, feel free to reach out and we can talk real estate!

Until next time,

Jesse

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Jonathan BombaciBusiness Member
Real Estate Agent · Lowell, MA · Member since 2019 · 1k+ posts · 1k+ votes
6y

@Jesse Cote welcome and yes Lowell is an interesting market. Me and my team are headquartered in Lowell and we focus on helping people invest in the area. Househacking is big in Lowell and it sounds like your friend has a good opportunity to pick up a property and rent it out by the room to other students or use the FHA loan to buy a 3-4 unit and live for free.

There are 6 major neighborhoods in Lowell and each of them are distinctly different. Given the strategy you're proposing I'd recommend focusing within 1 mile of the UMASS campus. The majority of students live on the other side of the river but you may find some better priced opportunities towards downtown Lowell. 

We were hosting monthly meetups in Lowell however they have been put on hold due to covid. We have a virtual meetup coming up at the end of September. If you want to attend just PM and i'll send you the link. It is on BiggerPockets under Events but that section of the site is pretty difficult to navigate. Also happy to hop on a call and answer any questions you may have. 

Best, 

Jon

[email protected]978-710-8611
Candor Realty4.760 Reviews
WebsiteView Page
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  • Derreck WellsPro Member
    Specialist · Pelham, NH · Member since 2013 · 544 posts · 269 votes
    6y

    I just wanted to drop you a note on the new lead paint laws in MA. They now only give you 90 days to delead when you buy a rental. If you don't delead within 90 days, you can be held liable for any lead poisonings that have ever happened at the building, even if it was before you owned it. They basically hold the building liable rather than the owner and that liability transfers from owner to owner until someone deleads it and breaks the chain, so just because you're planning to rent to college students, you'll still be liable for past tenants. It's just good business to plan on deleading during the purchase and if the building hasn't been deleaded, negotiate the cost during your due-diligence period. Assume a $5k per unit cost and count the exterior as a unit, so a 3 family will be 4 units. I have never seen a property come in higher than that, so that's a safe negotiating point. Most I've done come in about half of that, so even if you negotiate a 50/50 split, you could get the entire cost taken off the purchase price. If you send me properties you're looking at, I can check them against the database and see if they've ever been inspected for lead paint or if they've been deleaded if they were. 

    Here's the law as written:
    460.100: Duty of Owner(s) of Residential Premises
    (B) Whenever any residential premises containing dangerous levels of lead in paint, plaster or other accessible structural material undergoes a change of ownership and as a result a child younger than six years old will become or will continue to be a resident therein, the new owner shall have 90 days after becoming the owner to obtain a Letter of Full Compliance or a Letter of Interim Control, except that if a child younger than six years old who is lead poisoned resides therein, the owner shall not be eligible for interim control, unless the Director grants a waiver pursuant to 105 CMR 460.100(A)(3).

    Note it says "a child younger than six years old will become ... a resident therein...". It is assumed by the state that any rental larger than a 1 bedroom will fall into this category at some point because of the anti-discrimination laws that prevent landlords from refusing a family because they have a child. Basically this is their way of getting all rentals lead safe, because no matter what your business plan is, chances are there were kids living there before.

    If you don't already have an inspector you like to use, I recommend Anderson Lead Inspections, www.andersonlead.com. No, I don't get a referral fee or anything, I just know he's fair and works to help owners.

    As far as Lowell in general, I grew up there. Anywhere within walking distance to the college is usually overpriced, and MA is a very tenant friendly state and it's a long process to evict someone. I've seen people in Lowell lose properties because it took so long to evict and they couldn't pay the mortgage. There are many "professional tenants" there, so screening is very important. If the business plan is to rent exclusively to students by the room, that can be a very profitable venture, but will come with it's difficulties for sure. Make sure you have parents co-sign the lease so they're liable for the rent if the student defaults.  

    Good Luck!!

    Derreck

    1Reply
  • Jonathan BombaciBusiness Member
    Real Estate Agent · Lowell, MA · Member since 2019 · 1k+ posts · 1k+ votes
    6y

    @Jesse Cote welcome and yes Lowell is an interesting market. Me and my team are headquartered in Lowell and we focus on helping people invest in the area. Househacking is big in Lowell and it sounds like your friend has a good opportunity to pick up a property and rent it out by the room to other students or use the FHA loan to buy a 3-4 unit and live for free.

    There are 6 major neighborhoods in Lowell and each of them are distinctly different. Given the strategy you're proposing I'd recommend focusing within 1 mile of the UMASS campus. The majority of students live on the other side of the river but you may find some better priced opportunities towards downtown Lowell. 

    We were hosting monthly meetups in Lowell however they have been put on hold due to covid. We have a virtual meetup coming up at the end of September. If you want to attend just PM and i'll send you the link. It is on BiggerPockets under Events but that section of the site is pretty difficult to navigate. Also happy to hop on a call and answer any questions you may have. 

    Best, 

    Jon

    [email protected]978-710-8611
    Candor Realty4.760 Reviews
    WebsiteView Page
    2Reply
  • Jesse Cote
    OP
    Rental Property Investor · Stratham, NH · Member since 2020 · 56 posts · 20 votes
    6y

    @Derreck Wells Wow, thanks Derek, the advice is much appreciated!

    0Reply
  • Derreck WellsPro Member
    Specialist · Pelham, NH · Member since 2013 · 544 posts · 269 votes
    6y

    You're welcome Jesse. If you come across specific properties in MA and want me to run them through the database for you to see if they've been inspected, let me know. It's free and it could potentially save you thousands in purchase costs. Seems like a good ROI to me!

    0Reply
  • Besnik Kadriu
    Real Estate Agent · Boston Ma · Member since 2020 · 82 posts · 23 votes
    6y

    @Derreck Wells

    Hello Derreck ,

    I’m from the Boston area , currently live in Revere , looking to get my first investment rental property.

    As we know everything is overheated around the area and I’m looking hard to find a place. I want a multi family property. 2-4 units.

    So good to know what you do, and I appreciate any feedback and feel free to reach out. I love to talk anything real estate.

    Thanks

    1Reply
  • Taulant Hibroj
    Rental Property Investor · Wakefield, MA · Member since 2018 · 1 post · 1 vote
    5y

    Hi @Jonathan Bombaci, There was some great information you provided above. One thing I am having trouble figuring out in Lowell is which ones are considered the better/safer neighbourhoods. Can you also put a link to the next meeting you are doing. Thanks in advance.

    1Reply
  • Jonathan BombaciBusiness Member
    Real Estate Agent · Lowell, MA · Member since 2019 · 1k+ posts · 1k+ votes
    5y

    Hi @Taulant Hibroj thank you for the mention. The 6 neighborhoods definitely can be ranked by price range and desirability but fair housing laws prevent me from doing so since it would be an opinion and would be considered steering. I’d recommend googling crime statistics in lowell or asking an investor without a real estate license so they can give you their opinion, understanding of course that it would be an opinion. That being said average price by neighborhood is in my opinion a good indication of “market desirability”. 

    Unfortunately I can’t post the link to our next event here since that’s a violation of the forums policy but you can find it under the name pints & properties on the events tab or if you private message me requesting it I can send it to you. 

    Best,

    Jon

    [email protected]978-710-8611
    Candor Realty4.760 Reviews
    WebsiteView Page
    0Reply
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