What It’s Like Investing In Cambridge Real Estate

We’ve talked about Boston real estate, but what about its neighboring city – Cambridge? From quiet streets to trendy neighborhoods, the City of Squares attracts artists, thinkers, students, professionals, and businessmen into one place. And where else would they all reside besides Cambridge real estate?

Related: Best Places to Invest in Real Estate: College Towns

Cambridge Real Estate Overview

Cambridge recorded the highest home prices in the state of Massachusetts in 2016. High demand, in addition to a shortage of properties both have Cambridge real estate prices at a peak. And while there’s a shortage in supply, home sales have increased by 19% last year alone.

The spike in Cambridge real estate prices can be attributed to the city’s strong and growing economy, and the influx of university students. Cambridge’s pharmaceutical, tech, and research (in Harvard and MIT specifically) industries have all been expanding and driving more highly-skilled and highly-paid workers, as well as students and professors into the city.

Cambridge real estate is certainly one of the nation’s most difficult and challenging markets. In the seller’s market, a Cambridge home spends on average 12.64 days on the market. While towns like Melrose or Waltham, just 6 miles and 7 miles away respectively have an overage of 50 days for their property on the market.

But, it is worth it? Absolutely! Below, you’ll find Mashvisor data on top neighborhoods in Cambridge real estate and realize the great investment opportunity in the city.

Airbnb Cambridge

It’s no surprise that Airbnb Cambridge is such a success. The city’s international appeal makes it among the top Airbnb markets in the area, and a great investment opportunity. An inflow of tourists visit the city for its architecture, well known ivy-league universities, its art and culture scene, and its historical significance. Whatever’s on a tourist’s mind, Cambridge can flaunt it!

In regards to Airbnb Cambridge, the city has decided to create adaptive legislation to allow hosts and residents to rent their properties on the site without endangering life standards or the city’s culture for the locals. The city does not object to owner operate and owner operated flats. They are however, worried about commercial investors whose sole purpose of buying a property is to rent it out on Airbnb (and who make up 14% of total current Airbnb listings). The concern arises from the city’s critical property inventory shortage. City officials, as well as locals, believe commercial Airbnb investors further endanger Cambridge’s housing inventory stock.

The city is at the moment trying to figure out the legislative and the taxation measures it should take in regards to Airbnb Cambridge. Specifically considering that a large number of hosts in Cambridge are illegal. 26% of Airbnb listings in the city fall into zones that are illegal to operate tourist houses in without occupancy permits.

Still, the city of Cambridge believes Airbnb can maintain and preserve the city’s diversity and encourage residents to stay in the city. What the city’s trying to do is find a way to impose legislations that will make hosts, renters, as well as local neighbors all happy. They also believe that Airbnb may lead the legislation for itself and other sharing-economy services.

What should you take from all of this? Airbnb Cambridge is a great investment opportunity, but you will need to mind the legal aspects such as new legislations that may fall into place for commercial investors. So keep stay wide awake for any developments!

Related: Why invest in an Airbnb investment property over a traditional?

Top Cambridge Real Estate Neighborhoods

To better understand the opportunity of investing in Cambridge real estate, check out the top neighborhoods in the city provided Mashvisor data.

Wellington-Harrington

A primarily residential neighborhood, Wellington Harrington has some commercial areas. It’s the second most densely populated neighborhood in the city, yet is on the more affordable end.

• Median Home Price: $589,000
• Airbnb Occupancy Rate: 56.15%
• Cash on Cash Return
  • Airbnb: 4.95%
  • Traditional: 2.07%
• Average Rental Income/month
  • Airbnb: $3,967
  • Traditional: $2,466

The Port

Known as the hub for the US candy industry, The Port is another high-density residential neighborhood in Cambridge where about 7000 people reside. The Port lies on one side of Central Square – a hub for Massachusetts Bay Transportation Authority (MBTA) buses.

• Median Home Price: $794,000
• Airbnb Occupancy Rate: 62.68%
• Cash on Cash Return
  • Airbnb: 3.56%
  • Traditional: 1.79%
• Average Rental Income/month
  • Airbnb: $4,558
  • Traditional: $3,198

Cambridgeport

Cambridgeport is home to about 10,000 residents. It’s among the most expensive neighborhoods in Cambridge real estate. Cambridgeport lies on the other side of Central Square across from The Port.

• Median Home Price: $1,110,500
• Airbnb Occupancy Rate: 58.82%
• Cash on Cash Return
  • Airbnb: 2.2%
  • Traditional: 2.48%
• Average Rental Income/month
  • Airbnb: $4,168
  • Traditional: $4,277

Riverside

This is where most of Harvard University students reside. So if you’re considering a traditional Cambridge real estate investment, definitely consider Riverside. The neighborhood is situated along the Charles River, and is known for its convenient location, with Harvard Square and Central Square at each of its ends.

• Median Home Price: $798,000
• Airbnb Occupancy Rate: 50.82%
• Cash on Cash Return
  • Airbnb: 2.87%
  • Traditional: 1.28%
• Average Rental Income/month
  • Airbnb: $3,820
  • Traditional: $2,697

Related: How to Buy a Rental Property Using Mashvisor

To Sum Up On Cambridge Real Estate

As you can see from the data and analysis above, despite being a very challenging market, there’s a great opportunity in investing in Cambridge real estate. To make the most out of investing in Cambridge real estate, be sure to use Mashvisor’s investment analytical tools to view information on CoC return, cap and occupancy rates, estimated rental income, and much more. Our interactive investment property calculator will help you decide where you can make the most returns in Cambridge real estate!

Related: How Data Makes Real Estate Investors Rich: A Mini Guide