Massachusetts Rental Investing
Hi there,
Has anyone had true success in the rental market in MA? It seems as though there are two ends of the spectrum, the very expensive million dollar multi families near Boston, or the 100k multi families in the Worcester area and not many in between.
Has anyone started from nothing and become successful? I am having a hard time getting over the realization that these properties are vastly different in terms of price, and the lower cost homes/areas are just too much of a hassle to invest in.
Any thoughts?
I invest in the north Worcester area and been successful
I try to get two or three multi family units, 3s are better for cash flow but since I buy to fix and flip u have to watch how much u spend since the cities make u ad sprinklers
And that can get costly and zero return
My rents range from 700 to 1000 for 2 to 3bedroom units
My cost percent unit has to be below 60-65k
So far I have 6 units and adding
ps I have friends with over 50 units in Boston but numbers are different 200-300 and 2-3k in rents
there are lots of suburban towns you might find are more in the middle. Framingham and Marlboro typically have multis that are not dumps, yet don't break the bank.
It certainly can be done. We added 2 properties to our portfolio last year. Both were value add plays. It was a lot easier to find deals 2-3 years ago but there still out there. You just need to be willing to put in the work.
@Colby Mulry Welcome.
We all started from scratch, maybe a lot longer ago for some;-)
I haven't added any rentals in a year but I also do Buy-Fixup-Sells.
Right now I'm investing out of state and in a Business I see which as very profitable.
Western Mass has good cash flow in and around Springfield. There are many areas of Springfield to stay clear of though. PM me if you are interested in seeing some examples. We also wholesaled a house in Worcestor to an investor and they did great as a rental.
There are still good opportunities in the Worceter area.
it is very hard to get good cash flow in the cities surrounding Boston.
Build a network. Hustle. Take action.
Hey Colby!
I live in Quincy, but work the Worcester market mostly. There are a lot of great opportunities out there. There are a lot of great listings you could get in low, as well as make some pretty descent coin in rent. Especially with all the colleges sporadically throughout the area.
Also if you're up for a very low buy in, you could look into a "fix n flip" lending program. It covers 80% purchase, as well as 90% "fix" costs. A lot of short sales out there. If you have any questions about the program don't hesitate to reach out.
Best of luck!
-Ryan
Hi Colby,
I also live in Quincy MA, for me it's not the price that is the determining factor, rather the (ROI) return on investment. Yes the Boston now seems over priced due to very high demand, those that can afford to live in Boston and Cambridge ends up looking for places to rent or buy in the towns close to Boston. These towns close to Boston are the ones I focused on. My target tenants are young professionals and post-grad students. So far, this has worked fine for me.
I have a rental property in Quincy, and a multifamily house in Dorchester, I made sure both are close to public transportation (very important in rent pricing).
I would also suggest that you familiarize yourself with the BP Calculator tools, these would come in very handy in your business decision process.
@Jerry Agbon and you're probably only looking at 1 or 2 bedroom units if you're going for young professionals around Boston, near transportation?
@Mike Hurney Yes and no... 1, 2 and 3 bedrooms. 1and 2 bedrooms preferable in the Quincy area close to the red line T station. While in Dorchester 3 bedrooms is in higher demand.
Agree on Dorchester opportunities! I have one and am planning on more this year. Good ROI and with 5 Red Line stations, there are plenty of areas close to the T.
David
Colby,
I start from scratch, recently add few more triplex in Dorchester, three bed room rent for more than 2k.
@Jerry Agbon - nice advice! when you say ROI, are you referring to the time it takes to recoup your initial investment (in years/months)?
@Mike Hurney - we've got a couple 4BR rentals in dorchester near Ashmont and have been successful in finding market rate tenants, also professionals/grad students.
@Colby Mulry - if you have yet to buy a house, you can qualify for a number of first time home buyer programs and increase your ROI (we calculate this in terms of years based on before-tax cash flow) due to lower down payment requirements. it is difficult, if not impossible, to find something on the market, so you may need to look into various ways to get off market properties. you can network with others and let them know what you're looking for so if they get a lead that doesn't meet their criteria, you can be the first to know.
we are building up a list now, so feel free to send me a PM with your criteria/locations - we currently send marketing materials and get off-market leads in Dorchester, South Boston, and Somerville. We will continue to expand our marketing over the coming years to other locations in the GBA.
@Ray Hurteau By ROI, I meant the monthly cash flow after all expenses have been paid for.