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Posted about 2 months ago

Worcester is 3rd Worst for Tenants-What does it mean for the Landlord?

I have had this article pop up at least 3X a day on my various news feeds.

Some highlights:

  • 7th worst for available rentals
  • 2nd worst vacancy rate 1.7%
  • Median rent $2075
  • Year over year increase of $175
  • Worcester is bottom 5% of income for towns in MA

What does that mean for the landlord?

Some think it is great that there is low vacancy rate so they can charge more for their rentals.  This is only partially true.

Most of the people looking for rentals in Worcester have difficulty paying the asking rents.

Just looking at the rentals on the MLS tells this story.  A year ago if you looked for residential rentals you would see about 30 which is a small number.  Most of those rentals were around market rate.  Most rental transactions were done by the owner/landlords and not using the MLS.  Now when you look there are almost always over 100.  

Why when vacancies are so low, are there so many places for rent on the MLS?

There are a couple of factors, but the main thing is these landlords are looking for the perfect tenant. They want First/Last/Security, and often they want 680 credit score or higher.  This simply does not match with the rental profile of those who are looking for apartments in Worcester.

I think many of the new landlords in Worcester think they can magically get the same types of tenants they see in places like Boston.  That is not the case.  Most of the renters are living paycheck to paycheck.  

Renters who fit the profile required above often choose to pay a little more and move into one of the new large amenity filled buildings that are popping up, not on the 3rd floor of a 3 decker.

What should you do as a buyer of multifamily?  You should make sure that the location, unit size, finishes and parking of the building you are buying matches the type of tenant you are trying to attract.

Make sure you do your homework, or you will be one of the 100 units sitting on the MLS for an average 35 days in a market with 1.7% vacancy