Boston Neighborhoods for Rental Property Investment in 2018
Each time we decide on a topic of the next article, we try to imagine what kind of a person is most likely to be interested in reading it. This time was not an exception. Before typing the very first lines, we created a portrait of our prospective reader. And although we don’t normally make such information public, this time is different. Want some behind-the-scenes facts?
The most likely reader of this article is smart, forward-thinking, entrepreneurial, and a little adventurous. This person is always on the look-out for new business opportunities. He or she has found the happy middle between being creative and data-driven and sticks to it no matter what. And if you’re reading this right now, it’s you we are talking about.
The good news is that you made it to the right place. Because over the course of the next ten minutes, you’ll learn why Boston is a popular choice among smart investors and what makes it such. Feeling intrigued? It’s good if you are.
There is a whole lot of reasons why Boston is special. This city is already well-established, but still on the rise. It prides itself on being old but continues to embrace the new. Unlike other major cities in the US, it doesn’t look busy and hurry-scurry. Nonetheless, it attracts the nation’s third largest share of venture investment per capita. And although it’s true that the local rental market in Boston has already peaked last year, it is just as true that the demand for apartments for rent in Boston is stable and still high.
Being a low crime city, Boston is a great place to be regardless of what neighborhood you are in. Don’t be fooled by the fact that Boston is home to almost a quarter of a million students. Remember that we are talking about the most intelligent and well-educated students in the country, which means the city is young and vibrant yet not messy.
According to experts, the economy of Boston has been in especially good shape for the last few years, and the trend is gaining momentum. And given that the local economy is outperforming the one of the countries, it comes as no surprise that the smartest people keep flocking to the city in pursuit of success.
Speaking of the local housing situation, Boston is the third most expensive American city in terms of rental prices. Moreover, experts claim that homes in Boston are now underpriced on average by 2% and the prices are expected to go up by as much as 20% over the course of next years. As evidenced by this statistic, investing in Boston’s residential real estate might be your best bet.
All the above-mentioned reasons make Boston a hot place for property investment in 2017. And now it’s time to dig a little deeper and find out what neighborhoods of this city are the most promising in terms of return on investment.
Median Rental Price: $2,532/mo
Median Purchase Price: $478,000
The largest neighborhood in Boston and one of its most diverse, Dorchester might be your best bet. The area of fancy dining options, art galleries, parks, and boutiques. But the biggest perk of the ‘hood is its location. When in Dorchester, do as the Dorchester’s do (sorry, joke). On a more serious note, when in Dorchester, you can enjoy a quick access to the downtown either by a public transport or your own. It’s a vibrant area with its unique mix of residents of all religions and cultures. And may the local price for properties be the icing on the cake. Although some experts claim there are no affordable apartments in the city, Dorchester makes a good exception to this rule.
Median Rental Price: $2,415/mo
Median Purchase Price: $474,000
Back in the past, they used to call this place the ‘garden suburb’. And the good news is that there are still reasons to use this nickname in regards to Roslindale. The area is green and cozy and exceptionally good for long walks. Late-night entertainment and big city rush are the only two things you won’t find in Roslindale. Locals like this neighborhood for its moderate pace of life. Buy income property in this area and you’ll get the most well-behaved and calm tenants by your side.
Median Rental Price: $2,454/mo
Median Purchase Price: $505,000
Initially, this neighborhood was meant to connect the islands of Boston Harbor. Little did our ancestors know this place would become one of the most attractive parts of the city. In large measure, East Boston reminds of a small town surrounded by a big city on all sides. Some people associate this part of the city with Logan International Airport, one of the busiest in the country, but East Boston is more than just that. This neighborhood prides itself on having the most beautiful panoramic views and a lot of waterfront buildings. Buying income property in this area will cost you only slightly more than in Dorchester or Roslindale, but lower vacancy rates and higher custom offers from those willing to get that ocean view apartment will make great payoffs.
Median Rental Price: $2,707/mo
Median Purchase Price: $590,000
This place has been gradually evolving for many years in a row. And if you come here today, you’ll see it was worth it. Imagine a place of green alleys and parks, where life feels a little slower than in the rest of the world. Imagine a place where people say they care about environmental issues sustainability and actually mean it. Imagine a place filled with trendy restaurants, cozy bakeries, and classic barber shops. Not even to mention this neighborhood is remarkably good for outdoor workouts and morning walks with a dog. The median purchase price is higher than in the rest of ‘hoods on this list, but you see what you pay for (read: more quality tenants and higher monthly income).
Median Rental Price: $3,115/mo
Median Purchase Price:$1,300,000
South End is a key destination for the young professionals who already climbed up a ladder high enough but does want to settle down in the suburb yet. South End consists of the red brick Victorian style five-story houses organized in uniform rows with broad streets in between. The street structure is a dream of new urbanism – low rise building and plenty of public space to enhance communication in the community. Whereas the community in South End is affluent, successful and sophisticated. The streets of the neighborhood are filled with designer studios, artisan shops, and boutiques. The restaurants in the area are upscale and have a distinct style. The tenants who rent property in this area don’t haggle over price – they know what kind of lifestyle they are buying.
Median Rental Price: $2,000/mo
Median Purchase Price:$670,000
Cambridge is centuries old college town, populated by students from Harvard and MIT. Scholars from these universities are either extremely well endowed or receiving a very generous scholarship. Thus, rest assured, they can pay some extra for the quality apartment. The neighborhood also consists of technological incubators, innovative center and company’s offices, who recruit young upstarts. In the same time, the area offers plenty of entertainment: dive bars, pubs, restaurants of various national cuisine, etc. All of the establishments have a unique Cambridge atmosphere: a little rebellious, a little provoking, but kind and festive.
Median Rental Price: $3,292/mo
Median Purchase Price:$850,000
Back Bay has an eclectic style and very diverse community. It is notorious for the Victorian brownstone house, it is one of the few places with that kind of architecture in the US. In the same time, the neighborhood hosts one of the tallest building in the city- Prudential tower. The district is organized in wide, parallel, tree-lined avenues with low-rise houses. It is also a shopping and entertainment destination, especially Newberry street, Copley Place and Prudential Center malls. Back Bay has luxurious apartments for rent, some with marvelous views of the Charles River.
Median Rental Price: $2,918/mo
Median Purchase Price:$650,000
Another neighborhood with a high concentration of scholars, populated by huskies and terriers, students of Northeastern and Boston University. Fenmore is also a location of the basketball studio, large concert venues, and different bars. Everything a college student needs in one neighborhood. The quarter is a mix of commercial and residential properties, with old apartment complexes and some new condos. The inventory is increasing as new housing development emerges across the neighborhood. The rent prices remain high as the demand increases, fueled by the influx of students in the area.
Median Rental Price: $2,454/mo
Median Purchase Price:$880,000
A historically Italian district, North End has distinct appearance and flavor. It is an eclectic mix of the red brick traditional Italian neighborhood with narrow streets, pizza&pasta family restaurants and high rise condos of the business district. The neighborhood poses a couple of historical sights and numerous landmarks, together with thousand entertainment establishments it makes North End a beloved night out and tourist destinations. The proximity of financial district makes it a perfect spot for renting out apartments to finance and investment professionals or people who want to enjoy the vibrant life of the city center.
Median Rental Price: $2,467/mo
Median Purchase Price:$744,000
Young adults (age 18-34) make up 78.4% of the neighborhood’s population (as compared to 39.4% for the city of Boston as a whole). Only 13.9% are owning the property they occupy, meaning the vast majority of the residents are renters. This arrangement helps to avoid tensions between natives and a population of renters intrinsic to other Boston neighborhoods. Housing inventory consists of large brick apartment buildings along the Commonwealth Ave and surrounding streets, while the Brighton part is comprised of wooden triple-deckers. The area is dotted with different entertainment venues and business that serve student population: dance halls with live music, cheap eateries, coffee shops to pull all-nighters. If you want to acquire a profitable rental that would never suffer from the high rate of vacancies and low turnout, invest in Allston.
Hopefully, this short guide helped you with your deliberations. But in case you’re still in doubt, go seek additional information from real estate investment associations in the area. By a good chance, Boston has gotten plenty of them. Massachusetts Real Estate Investment Association, Boston AREIA, and Boston Real Estate Investors Association – the biggest and most trustworthy ones – are only some of the options to choose from. Don’t shy away from asking for a professional opinion: investment in rental property is a serious step to take and there are plenty of factors to be weighted. Additionally, Boston is not the only promising market you can invest, check out the growing housing markets of Philadelphia, Chicago, and Orlando.