The Boston real estate market offers tremendous investment opportunities in 2019. The city has a lot to offer in terms of high-end amenities and its economy is still booming. More importantly, Boston house prices have been steadily rising in recent years with no signs of slowing down. Needless to say, investing in Boston real estate can be highly profitable if you pick the right investment location.
In this article, we’ll give you a general overview of the Boston housing market before doing a detailed breakdown of where to invest in real estate in this city.
Boston Real Estate Market Data
Data analysis is an important part of real estate investing. Having access to in-depth metrics regarding the various aspects of the market is the only way to ensure a good return on investment. In fact, relying on instinct and intuition can only get you so far when you are dealing with something as multifaceted as real estate. Fortunately, Mashvisor has made access to such data quite convenient thanks to valuable tools like the investment property calculator. You can click here to learn more about it. But first, here is some data about the Boston real estate market.
- Median Property Price: $987,431
- Price per Square Foot: $717
- Price-to-Rent Ratio: 30
- Traditional Monthly Rental Income: $2,773
As you can see, city-wide data reflects a healthy real estate market that is ideal for a traditional rental strategy. But where are the most lucrative Boston investment properties located? To answer that question, let’s go over the data of some of the best neighborhoods in the Boston real estate market.
Best Neighborhoods for Boston Real Estate Investment
Due to the city’s restrictive laws on Airbnb, our list will focus on traditional real estate investments. The best neighborhoods in Boston that we picked boast all the essential amenities and are perfectly suited for long-term rentals.
- Median Property Price: $622,633
- Price per Square Foot: $493
- Price-to-Rent Ratio: 17
- Rental Income: $3,046
- Cap Rate / Cash on Cash Return: 2.1%
- Median Property Price: $1,296,600
- Price per Square Foot: $713
- Price-to-Rent Ratio: 23
- Rental Income: $4,695
- Cap Rate / Cash on Cash Return: 1.8%
- Median Property Price: $536,760
- Price per Square Foot: $328
- Price-to-Rent Ratio: 19
- Rental Income: $2,372
- Cap Rate / Cash on Cash Return: 1.8%
- Median Property Price: $404,498
- Price per Square Foot: $248
- Price-to-Rent Ratio: 16
- Rental Income: $2,132
- Cap Rate / Cash on Cash Return: 2.2%
- Median Property Price: $479,000
- Price per Square Foot: $397
- Price-to-Rent Ratio: 20
- Rental Income: $2,041
- Cap Rate / Cash on Cash Return: 1.1%
Reasons Why You Should Consider Investing in the Boston Real Estate Market
There are several factors that make the Boston real estate market an attractive option for real estate investors. The city’s metropolitan area contains more than four million people and it is home to 80% of Massachusetts’ population. Its economy is as strong as ever and the downtown area remains a hot market that attracts large investments. As for whether the market is a buyer’s market or seller’s market, real estate market trends point towards the latter.
Here’s a look at the top reasons to invest in the Boston housing market.
The City Attracts a Young Population
Attracting a growing millennial population is a good indicator of the market’s future prospects. This demographic is buying more houses than any other generation. Moreover, Boston’s booming job market ensures a consistent influx of high-income young professionals into the city. This bodes well not only for the Boston real estate market but for the city’s economy as a whole.
The Job Market Is Strong
Boston is the center of several growing sectors, namely tech, biotech, and finance. The city is ranked as one of the top locations for startups in the world and its large service industry continues to attract job seekers from all over the country. These factors have contributed to boosting the local housing market.
The Appreciation Rate Is Very High
The Boston real estate market boasts one of the highest appreciation rates in the country. As a matter of fact, the rate is expected to remain above the nationwide average in the foreseeable future. This appreciation is backed by solid economic fundamentals, so a rate drop doesn’t appear to be imminent.
Boston’s Real Estate Laws Are Landlord Friendly
Compared to other cities in the region, Boston’s laws are friendlier to landlords. Unlike New York, there are no limits on late fees and notice is not needed before entering the premises. Furthermore, the state of Massachusetts doesn’t require a rental license for landlords.
Boston Rental Properties Generate High Cash Flow
This is without a doubt the biggest selling point of the Boston real estate market. The city’s average rental rates are significantly higher than in most US markets. This can add up to a sizable passive income if you decide to invest in multiple rental properties. Compared to other cities in the northeast, Boston investment properties can generate high cash flow at half the price.
The Market Offers a Lot of Great Deals
As mortgage interest rates increase, home builders tend to cut prices to relieve some of the pressure from the market. This is currently the case in the Boston real estate market. According to the Washington Post, home builders are cutting the price of new properties by up to 6%. As a consequence of this, savvy real estate investors can find profitable investment deals in the city with relative ease.
The Boston real estate market is quite expensive relative to other markets in the US, but as mentioned, you can still find good deals. Investors who have the means to buy an investment property in the city stand to generate a decent rental income.
To start looking for and analyzing the best investment properties in Boston, click here.