Where to look for a small multifamily in Boston?

Rental Property Investor · Ann Arbor, MI · Member since 2015 · 22 posts · 1 vote

Based on your experience, in which neighborhoods in Boston would you look for a small multifamily that cash flows as a long-term rental? Which neighborhoods are popular with renters that can afford Boston rents? I know it's not an easy task.

I'm looking at the city of Boston primarily but also in the immediate vicinity easily accessible by public transportation.

We are out of town so I'm doing research and trying to build a mental map of the city and the areas to focus on.

Thank you!
Martin

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Daniel McDonald

Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes

Somerville, Malden, and Medford are great areas still very close to the city. Strong rental pool, very attractive to younger people. Expensive yes, would likely need to get creative to cash flow but appreciation would be a game changer.

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Lien VuongBusiness Member
Real Estate Agent · Boston, MA · Member since 2018 · 2k+ posts · 1k+ votes
2y
Unfortunately Boston property is not a cash flowing market, all appreciation. You can potentially look at some opportunities in Dorchester, Roxbury, and Mattapan zip codes but they tend to be Section 8 exclusive neighborhoods. On the flip side, Boston in general has very high demand for rentals period and units that are priced well tend to move within 30 day's time for move ins. Let me know if you'd like to connect on further local knowledge.
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Martin S.
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Rental Property Investor · Ann Arbor, MI · Member since 2015 · 22 posts · 1 vote
2y
Quote from @Lien Vuong:

Unfortunately Boston property is not a cash flowing market, all appreciation. You can potentially look at some opportunities in Dorchester, Roxbury, and Mattapan zip codes but they tend to be Section 8 exclusive neighborhoods. On the flip side, Boston in general has very high demand for rentals period and units that are priced well tend to move within 30 day's time for move ins. Let me know if you'd like to connect on further local knowledge.
Hey Lien, how about areas that would break even on cash flow and have strong appreciation? What would you recommend?
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Tory Keith
Real Estate Broker · Natick, MA · Member since 2017 · 15 posts · 9 votes
2y
Agree with Lien's comments above. You might break even or find some positive cash flow if you're willing to take on a major renovation or if you're only financing a small amount of the purchase price. Mid-term rentals would be another way to increase cash flow. Most neighborhoods in and around Boston have seen steady appreciation.
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Andrew FreedBusiness Member
Investor · Worcester, MA · Member since 2020 · 1k+ posts · 1k+ votes
2y
@Martin S. - If you're looking for cash flow in Massachusetts, you'll have a better chance of finding it in Western MA. The more West you go from Boston, the higher the cash flow and the lower the appreciation. Personally, I invest in Worcester because I believe it is a nice balance of cash flow and appreciation. You can go more west and find more cash flow, but that comes at the cost of higher property values down the road. Feel free to reach out if you have any further questions.
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Daniel McDonald
Real Estate Agent · Beverly, MA · Member since 2019 · 358 posts · 308 votes
2y
Somerville, Malden, and Medford are great areas still very close to the city. Strong rental pool, very attractive to younger people. Expensive yes, would likely need to get creative to cash flow but appreciation would be a game changer.
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Saad Munir
Realtor · Boston, MA · Member since 2023 · 11 posts · 7 votes
2y
Hey martin, I'm an investor in the Greater Boston area - a few condos and a multifamily and agree that it is definitely difficult to cash flow if you get in to a place that faces competition to win. But there are definitely multifamilies out there that have been sitting for a while and that you can get a deal on. The problem of course is interest rates if you plan on getting a loan. You may need to deal with a little bit of negative cash flow for a while before refinancing own the line. But the appreciation is awesome. Agree with Lien above that the major play in Boston is for the appreciation. That's the chess versus checkers game in my opinion.
Happy to explore strategy with you at some point if you feel that would be helpful.
Good luck either way!
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Martin S.
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Rental Property Investor · Ann Arbor, MI · Member since 2015 · 22 posts · 1 vote
2y
Quote from @Tory Keith:

Agree with Lien's comments above. You might break even or find some positive cash flow if you're willing to take on a major renovation or if you're only financing a small amount of the purchase price. Mid-term rentals would be another way to increase cash flow. Most neighborhoods in and around Boston have seen steady appreciation.
Thank you, Tory.
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Martin S.
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Rental Property Investor · Ann Arbor, MI · Member since 2015 · 22 posts · 1 vote
2y
Quote from @Andrew Freed:

@Martin S. - If you're looking for cash flow in Massachusetts, you'll have a better chance of finding it in Western MA. The more West you go from Boston, the higher the cash flow and the lower the appreciation. Personally, I invest in Worcester because I believe it is a nice balance of cash flow and appreciation. You can go more west and find more cash flow, but that comes at the cost of higher property values down the road. Feel free to reach out if you have any further questions.

Thank you, Andrew.
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Martin S.
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Rental Property Investor · Ann Arbor, MI · Member since 2015 · 22 posts · 1 vote
2y
Quote from @Daniel McDonald:

Somerville, Malden, and Medford are great areas still very close to the city. Strong rental pool, very attractive to younger people. Expensive yes, would likely need to get creative to cash flow but appreciation would be a game changer.

Thank you, Daniel.
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Matthew CrivelliBusiness Member
Lender · MA · Member since 2021 · 1k+ posts · 1k+ votes
2y
@Martin S.
2-3 family homes in Springfield MA will cashflow much better than anything out in eastern MA and the cost of entry is much lower BUT you won't see the appreciation you get on the other side of the state. It's a trade off either way!
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Martin S.
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Rental Property Investor · Ann Arbor, MI · Member since 2015 · 22 posts · 1 vote
2y
Quote from @Matthew Crivelli:

@Martin S.
2-3 family homes in Springfield MA will cashflow much better than anything out in eastern MA and the cost of entry is much lower BUT you won't see the appreciation you get on the other side of the state. It's a trade off either way!

Thanks, Matthew. That's the conclusion I'm reaching too.
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Dave Skow
Lender · Seattle, WA · Member since 2014 · 2k+ posts · 899 votes
2y
@Martin S.- thanks ...if you need to use financing to purchase the property - make sure you are fully pre approved before beginning the property search .
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