New Hampshire, Areas For Buy & Hold

16 Replies

New Hampshire has always been on my short list of places I could live in my post NYC future.

I know what areas I think are nice. We're actually big fans of Keene, for the occasional weekend trip. That being said, I have never asked advice from NH investors.

What areas are people investing in for cash flow, buy & hold? What property types tend to be popular? Who are your renters? Where do they work? Why do they live in NH?

Thanks in advance.

The rumors I'm hearing are that Rochester, NH is poised for growth. I've never been there, but I've never heard nice things about the place. Still, might be someplace worth looking into more.

@Erick T.  

Thanks. How has Manchester been? How does it seem? The town seemed very quiet last time I was there.

I've only lived here for ~3 years, so I'm no expert by any means. I've always thought of Manch as a big town, rather than a small city. However, there has been growth and downtown is mostly occupied (I see few empty commercial spaces) with quality restaurants and bars.
I haven't been looking at the RE market too closely since I bought my first MF last summer. At the time though the market was very hot, and there were MLS listings being sold within a few days of posting, sometimes for more than asking price. So I expect the MF market is still in a state of low supply, and the properties definitely struck me as overvalued when I ran the numbers.
I will probably continue to invest in Manch since I live here and will be doing most of my own property management, but if you're just looking for the best ROI I don't think Manch offers it. Nor does Nashua from what I've seen, and Concord's property taxes are obscene.

One thing I'd definitely take into careful consideration with NH in general are the high property taxes here, which IMO result in minimal upkeep or concern with exterior improvements. So buildings here can end up with low curb appeal and while this helps owners keep their tax assessments down, it doesn't do much for appreciation. The limited supply does appear to drive appreciation, however. So maybe look for areas with limited new development, but healthy remodeling/improvement. How you'd find that, I'm not sure. 

Hi Trevor, I moved to NH in 1972. Beautiful place to Live, especially if you love outdoor activities like I do. I've hiked all of NH's 4,000' Mts., then went on to do all of New England's, but that was years ago, in my youth (late 40's). 

Anyway, as far as investing goes, I've lived in the Seacoast area only, so I can't comment on the rest of the state. But I've watched the Seacoast Cities grow a lot since I've been here. When I first moved here I joked about someday renaming the area "Port Dovsomechester" when it became what I called a "Megalopolis" ( For Portsmouth, Dover, Somersworth, and Rochester) And sure enough that's how I've seen it grow, and now it's hit Farmington (next town up from Rochester) where I live.

As far as investing in Rental Real Estate, I've watched Portsmouth get overpriced, then Dover. Right now I look for properties in Somersworth, Rochester, and Farmington only. People paying the prices they get in the other cities must not be looking for much of a return on their investment to pay the prices they do.

In closing, Warren Buffet even said recently that Real Estate is a good place to have your money right now. And he's right, even here in NH. There are some good deals if you take the time and put in the effort to find them. And what you buy will only get better as we head into the next "boom". 

@Trevor Ewen   Nashua is an excellent location for rentals.  Be wary of specific spots in the city.  New complexes are being built off a major roadway right now due to huge demand.  I have MANY friends with MFs in Nashua.  Taxes, as stated above, are high but prices on MFs seem to consider this.  I don't buy under 10 units but if I did I would be picking up 3/4fams here.

I'm in the eastern Monadnock area (between Keene and Concord).  Not a rapidly growing area, but not shrinking either.  I think Keene itself is a good bet for future buy-and-hold; I am looking there myself.

Manchester and Nashua both have decent prospects.  There are those who will tell you not to buy anything in either city that is on a street named after a tree (Pine, Chestnut, Laurel, etc), but while that does a pretty good job of eliminating the worst areas, it excludes so very decent areas.  Manchester multi-families are frankly under-taxed.  There is in effect a huge subsidy of MFRs on the backs of SF homeowners.  That is why I don't invest there: I do SF only, and it doesn't make sense in Manch-Vegas.

One thing that can trip up people from more urban areas is thinking that small towns and rural areas must all be "OK", from a poverty and crime perspective.  This is not true.  There are small towns in this state I would never let my family live in, with some pretty grim poverty and social indicators, high crime (especially meth) and lousy schools.

About schools:  they matter a whole, whole lot.  And you can't use high property taxes as an indicator of good schools; even towns with lousy schools have high taxes.  And good and bad districts can be right next to each other, in towns that look superficially very similar.  For example, the Hillsboro schools have for years been considered among the worst in the state (they're improving), and Hillsboro borders the Contoocook Valley and John Stark districts, which are excellent.

NH also has few traditional neighborhoods in its smaller towns.  A million dollar plus house may very well be within a couple hundred yards of a rotting trailer.

Generally, the fundamentals (economy, taxes, population growth, job creation, education) are better in NH than in most of the northeast.  But local knowledge is very important.

If you have any specific questions, let me know.

PS, one last example.  There is a profound difference between Keene, and say Claremont or Newport, even if they seem similar on paper.

What areas are people investing in for cash flow, buy & hold? The rental markets are strong in the places noted above. Here's how I see them breakdown when it comes to money. I could be off but I've lived in most of these areas personally and this is how they feel to me.

$$$$$ - Portsmouth/Seacoast (Hampton Beach seasonals are high in summer/low in winter)

$$$$ - Keene, Nashua, Dover, Durham Area

$$$ - Manchester, Salem, Concord

$$ - Somersworth - Rochester - Plymouth, Lebanon

$ - Berlin / North NH

There are no big cities. Manchester is about 4 or 5 times the size of Keene population wise and that's the biggest city. As mentioned above, it's kind of a "large town". There are a good deal of SF in every town. I used to live in "the zone" in Manchester and felt safe walking to the store at midnight. Even the bad areas of NH are nothing crime-wise compared to any of the cities in Massachusetts. Perhaps because of more strict drug policies?

The southeast (Rt 3 East) is where most of the money is. As mentioned above, Portsmouth is outrageous, but commands a very high rental market. I paid $700/m in downtown for a studio 10+ years ago. As Al mentioned, the markets surrounding it have had good growth and a resurgence in the past few years.

http://project.wnyc.org/median-income-nation/#8/42...

What property types tend to be popular? When I think New Hampshire I think colonial or old farm house. A ton of old 4-5 family units in Manchester. Do some google street view around Nashua & Manchester. 

Who are your renters? Depends on the area, but in the Southeast, they are working class. Hi property taxes and housing prices can keep a lot of people renting into their 30's. Blue collar.

Where do they work? There are a few big jobs up here. Some off the top of my head: UNH, Dartmouth,Hypertherm, Timberland, Lindt, Dell, SIG. There are a good deal of contractors and blue collar workers. There used to be paper mills up north, but they shut down and added a prison (Berlin) and the place has gone to par. If you're a risk taker in it for the long haul, places can be had really cheap up there. 

Why do they live in NH? As mentioned above, safety, good schools, no sales tax. Plus our motto sounds kind of bad ***. Live Free or Die. 

People live in NH for Freedom.  Free to own a firearm with limited hassle and time if you are a good citizen, in MA it takes an act of congress even for prior service members like myself.  Keep what you earn, the State doesn't take your income, no sales tax... Again no sales tax, wow!  MA has extra taxes for SODA, not even kidding.  Ill happily pay higher property taxes bc I chose my town and my kids school system so at least i KNOW where my taxea arw going.  

A grown guy or gal can ride a motorcycle without a helmet, I ride and I always where a helmet but I don't think my State should tell me I have to.  There is still freedom in this State. 

Now on to real estate, but NH is truly a special State so I had to write that :)

One thing nobody mentioned is the impact of 93 expansion.  That's allowing Granite Staters to have an even better commute into the North Shore of MA where all the fantastic jobs are, thats where many of us work.  MA salary but NH quality of life, and the sweet spot for getting those qualities without a torturous commute is Southern NH.  We're talking Plaistow, Atkinson, Hampstead (I'm biased but its the greatest town ever) Derry, Londonderry, Nashua, Merrimack and Hudson.  

Nashua and Merrimack are often rated amongst the top 50 towns in the entire Country for the jobs, lifestyle, schools etc.  

Richard makes an excellent point about schools.  That what NH towns are all about, there are some very poorly manages towns with high taxes that don't buy you much. 

@Trevor Ewen   I currently live in NYC (lower Manhattan) but grew up in Bedford, NH (outside of Manchester) and have investment properties in the Seacoast area. Interesting, I wanted to learn more about Long Island City this weekend! Here's my quick response and feel free to reach out directly if you want more data:

- Focus on the Seacoast (Hampton up through Portsmouth) as I believe you will find the best job growth and energy in that area

- Portsmouth has gotten outrageously expensive as others mentioned so it will be really tough to find a buy and hold which cash flows. We managed to get in a few years ago and got a deal but the recent attempts have not been fruitful. We lost a full price cash offer recently on a 2 / 2 with no explanation from our realtor. People are not buying in Portsmouth based on the BP calculator and solid data.

- Check out some of the towns a bit south of Portsmouth where there is some good growth and schools (Hampton, Exeter, Brentwood)

- I cannot comment on whether Rochester is on the upswing but you should check it out

- It's hard to recommend Manchvegas but I am biased since I grew up around the area and went to high school there. Every time I go back I wonder how the heck that city didn't clean up more and explode. The airport is amazing but it just doesn't have a good vibe to me whereas the Seacoast has some really charming areas. I'm guessing you could cashflow some properties there, I just wouldn't get excited about investing in the area. Bedford (nice town outside of Manchester) is nice but I cannot comment whether you should buy and hold there.

Good luck with your search and definitely give NH a shot for the reasons others have outlined - it's a great state!

Thanks @John Tanner  

If you want to know anything about Long Island (or need a tour) just drop me a line.

What a great thread. Exactly what I am interested in.

My family has a long term connection to NH ... Here's some background and a request for an update on comments.

I qualify for the "First Home Buyer's" government program - so I can buy up to a 4 unit MF home with it, and only put down 5 percent .... and pay off the large mortgage.

Then virtually immediately, I will buy an investment property on a mortgage ... I have about $300,000 for that, and I plan on considering anything from 300k - 1 M
I am 100% focused on CAP rate, and long term buy and hold. . .

I want to do them relatively closely so that I can have more leverage with the Property Mgmt company I'll hire to manage them.

I have a friend in Conway that rents out her townhouse ($125k purchase price) on AirBnB with crazy numbers (rents it about 140 days a year at $200 a night, and after property taxes ($2500, and HOA fees of $250/mo) has NOI of $20,000, a CAP rate of > 15%)


I'd love to know anyone's thoughts on WHERE they'd go now, if they could go ANYWHERE for buy and Hold .... would it still be NH?  AND WHERE (I love'd the info on knowing the SCHOOLS!)


Thanks

THE MID TERM GOAL:
Once I've purchased the two properties, and have some factual data on them, I plan on going to my network in China and getting investors in properties in the USA. That will allow me to:
- open a RE Agency to buy said properties for clients
- open a Property Management company to manage said properties
- open a Handyman company to handle changes, improvements for said properties

So if you're interested, connect with me. I'm going to build a team in the area I invest in.

Higher cap rates mean less demand.  Less demand then probably because less profit.  Why are you looking for less profitable properties?

Hi @Bob Bowling

I'm new to the verbiage. I have subsequently reviewed the CLASS A, B, C terms. I am interested in Class B (in class A locations) that I can fix up to get to higher rents.

I'm long term holder mentality

@Sean T.

would you still say Nashua?

I'd love to hear an update on the locations

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