Good timing for Boston / Greater Boston - Multis ?
I've been very interested into purchasing my first multi in the Boston / greater boston area (Eastie or Dorchester being my greatest interest).
I've been watching the market via MLS for months and based off last 3 months it seems a TON has gone to market and has been sitting. Would you consider this a good time for the Boston market given I'm a first time buyer?
At the right price, everything sells. It may come down to who you want for tenants. I was hosting an open house yesterday in Dorchester and another agent noted that rents were way down. Well, she was talking about market rents in South Boston, where she does most of her business. Section 8 is still strong and is not going anywhere. Also, an investor has just flooded the market in Dorchester with about ten three-deckers. Sadly, they don't really seem priced to move.
Boston has been a strong and high absorption market historically meaning that properties come on and off the market very quickly because the abundance of qualified consumers in this marketplace. With that being said, there's always opportunities for good deals on and off market if you're looking at the right lenses. @David Cahill's observation is correct that city rents have decreased in 2020 but I am suspecting that it is a temporary shift as we are recalibrating towards today's pandemic lifestyle. It is times like this that you can get a stronger deal as some investors are more fearful and have a lower risk tolerance for getting a multi family property.
Specifically with a 'househack' strategy, I think it would be a prudent time to engage in the market as you can take advantage of the sub 3% interest rate and reduce your current living expenses while having your tenants pay the bulk of your debt obligation. In 24 months if market shifts and prices decreases so you would potentially get a lower priced property but your interest rates increase yielding same mortgage payments and you've lost out of 2 years worth of deductions and debt payoff.
Hope that give you some perspective of the local market :)
@David Cahill I know who you are referring to about the 10 multi unit properties. I saw the deal before it hit the market and actually saw a few that had decent returns. I'm surprised to see them still sitting on the market. Albeit, I am new to this game and could have run my numbers wrong.
@Patrick McKinney I think there's a lot of value in what everyone else has said. One other thing to kind of shift your perspective on market timing is that its never going to be perfect, and unless you are planning on flipping the property, I probably wouldnt let that impact your decision too much. If you're gonna hold the property long term, than the sooner you get in the better your returns will be, especially in a market like Boston that I expect will be pretty resilient over the next few years anyway.
That being said, most multies that are not over-priced or are not dumps are still pretty competitive. You'll have to take many stabs, but eventually you'll be able to pull it off!