Buying Investment Property The Investor’s Guide to Buying Homes for Sale in Maine by Alfred Lauzon June 20, 2022June 21, 2022 by Alfred Lauzon June 20, 2022June 21, 2022 In this article, we will talk about things to look for when buying homes for sale in Maine, its pros and cons, and some cities worth looking into. Table of Contents Investing in Maine: Why You Should Consider It Investment Strategy: Which One Should You Choose? Wrapping It Up Maine is located in the northeastern part of the country. It is bounded by New Hampshire to the west and New Brunswick to the northeast. It is the largest of the six New England states found on the East Coast. The state, also fondly known as Vacationland, is famous for its lobsters. While its crustacean delight is enough to draw in a significant number of visitors annually, it still got plenty to offer. Let’s take a closer look at what Pine Tree State offers for home buyers, real estate investors, and visitors. Investing in Maine: Why You Should Consider It Maine may not be as famous as other states like California or New York, but it can hold its own regarding certain things. For one, it is conducive to raising a family. It is ranked as one of the best states with a good educational system, low crime rate, and lower obesity rate. Families get to experience nature in a whole new and more meaningful way. There is a great sense of community that makes one feel they belong. Mainers are wonderful people who always look out for each other, never hesitating to lend a helping hand. Families will thrive in an environment like this. Two, Maine weather is one of the reasons why it is called Vacationland. It is so diverse in what it can offer tourists and visitors. There are tons of fun things to do all year round and several awesome sites to visit. Maine winters might be really cold but are worth enduring for the three other beautiful seasons, especially summertime. Simply put, it’s just beautiful. There’s no other way to describe it. Real estate investors and home buyers will greatly benefit from what the Pine Tree State offers. But before you go out buying houses for sale in Maine, you first need to know what are the ups and downs of investing in real estate Maine. Related: Maine Housing Market Forecast 2022 The Pros and Cons of Investing in Maine You might be seriously considering purchasing oceanfront homes for sale in Maine. Before doing so, you first need to consider Maine’s good and not-so-good sides. The Benefits Living in Maine comes with certain benefits to it, including: Very Affordable Cost of Living. The cost of living in Maine is absolutely low. It is an excellent place for families to live and build savings, especially if you’re good with money management. Everything is quite affordable, including housing. Whether you buy a house to use as a residence or start a rental property business, home buyers and investors are guaranteed reasonably-priced housing. Those looking for investment properties will find great deals in Vacationland. You just need to perform due diligence and check out MLS Maine to know where the most profitable locations are. Lots of Forests and Recreational Spaces. Next, Maine is home to unparalleled natural attractions that both residents and visitors can enjoy the whole year. The forests, parks, and lakes offer tons of great outdoor recreation for families and friends. Lots of awesome hiking and biking trails can be found around Maine. You can go whitewater rafting in one of its 32,000 miles of river and streams. It is home to 3,478 miles of coastline and around 4,000 off-shore islands. Camping sites are plentiful and can be done in its forests or one of its 6,000 lakes and ponds. It makes buying lake homes for sale in Maine a great investment opportunity. The bottom line is that there’s really so much to do in Maine that boredom is never an issue. One of the Safest Places to Live in the US. Maine boasts one of the lowest crime rates in the country. In fact, it is known as one of the safest places in the US. Some would even dare say it is one of the safest places to live in the world. Mainers aren’t concerned as much about safety, because of the state’s lowest violent crimes per capita. With its current crime rate of 1.1 incidents for every 1,000 persons, residents of the state live with a greater sense of security. Great Sense of Community. Mainers are known to be very warm and friendly. They are known for being kind and helpful. It’s not surprising at all, considering that the state is one of the safest places in the world. The Drawbacks Maine might seem like a place where fairy tales take place, but it is not without its share of downsides. Older Population. Maine is one of the older states in the country, both literally and figuratively. It is the oldest state in the Union and one of the oldest in the country. The Pine Tree State is also home to an older population, with an average age of 44 years. It is known to be an ideal place for retirees to relocate to because of its simple and laid-back environment. Not for Those Looking for a Fast-Paced City Life. While there are lots of younger people living in Maine, it might not be suitable for Millennials and Gen Zs who are looking for and are used to the big city life. The Maine lifestyle is quite different from most urban centers. The Winters Can Get Really Cold. When we say winter in Maine, we truly mean winter in every sense of the word. Locals get to experience some of the coldest winters in the country. It might not be a great place to live for those who love warmer climates. Maine’s State-Level Data Now that you know the advantages and disadvantages of investing in Maine, here are some numbers investors need to take into account. The following data is provided by real estate website Mashvisor. Number of Listings for Sale: 1,643 Median Property Price: $692,039 Average Price per Square Foot: $301 Days on Market: 108 Monthly Traditional Rental Income: $1,687 Traditional Cash on Cash Return: 1.03% Traditional Cap Rate: 1.05% Price to Rent Ratio: 34 (high) Monthly Airbnb Rental Income: $3,964 Airbnb Cash on Cash Return: 3.73% Airbnb Cap Rate: 3.81% Airbnb Daily Rate: $240 Airbnb Occupancy Rate: 58% Walk Score: 44 Whether you choose to invest in coastal homes for sale in Maine or somewhere inland, obtaining all the relevant information will lead to smarter investment decisions. It is the kind of information you will need to perform a proper real estate market analysis. If you want to come up with a more accurate projection of your return on investment, you need to do this. To learn more about how Mashvisor can help you find profitable investment properties, schedule a demo. Investment Strategy: Which One Should You Choose? When investing in Maine real estate, you need to put a sound investment strategy in place. When it comes to real estate properties in Maine, investors can choose from several options. The first is to fix and flip homes for a profit. The fix and flip strategy will require greater capital investment since you will still need to perform repairs and home improvements on a property to get a good profit off it. The second option is to go the micro-flipping route. You just need to look for undervalued and distressed properties and make the sale fast without performing any repairs or updates. Such a strategy, however, is not a good way to build wealth, though. The third option is to buy income properties to convert into rental properties. You can buy single-family units, condos, or tiny homes for sale in Maine and use them as either long-term or short-term rentals. The advantage of investing in a traditional rental property is that you are more likely to expect a fixed amount of money regularly. However, the downside is that it limits your flexibility. Short-term rentals, on the other hand, offer so much income-generating potential in Maine, as seen later on in this article. Currently, there are no state laws strictly regulating vacation rental properties in Vacationland, except for Rockland, Bar Harbor, Lewiston, and Portland. The increase in rental prices in Pine Tree State can be attributed to the continuous growth in its short-term rental market. Getting an investment property listed as a rental is now considered a crucial income source for a lot of Mainers. Even mobile homes for sale in Maine are being converted into vacation rentals. That being said, rental property investors will benefit from starting a rental property business in Maine. Related: How to Choose the Right Rental Property Investment Strategy for You Starting a rental property business in Maine can prove lucrative for rental property investors in the state. Top 5 Cities to Buy Homes for Sale in Maine for Traditional Rentals According to Mashvisor’s data, here are the top locations for Maine real estate listings suitable for traditional rentals. The list is ranked according to the percentage of cash on cash return it offers investors, from the highest to the lowest: 1. Lewiston Number of Listings for Sale: 31 Median Property Price: $301,619 Average Price per Square Foot: $188 Number of Traditional Listings: 1 Monthly Traditional Rental Income: $1,323 Traditional Cash on Cash Return: 2.85% Traditional Cap Rate: 2.95% Price to Rent Ratio: 19 (medium) Days on Market: 38 Walk Score: 88 2. Kittery Number of Listings for Sale: 20 Median Property Price: $773,510 Average Price per Square Foot: $538 Number of Traditional Listings: 0 Monthly Traditional Rental Income: $2,885 Traditional Cash on Cash Return: 2.41% Traditional Cap Rate: 2.45% Price to Rent Ratio: 22 (high) Days on Market: 39 Walk Score: 53 3. Bangor Number of Listings for Sale: 21 Median Property Price: $351,057 Average Price per Square Foot: $176 Number of Traditional Listings: 0 Monthly Traditional Rental Income: $1,419 Traditional Cash on Cash Return: 2.34% Traditional Cap Rate: 2.42% Price to Rent Ratio: 21 (high) Days on Market: 16 Walk Score: 78 4. Sanford Number of Listings for Sale: 31 Median Property Price: $350,423 Average Price per Square Foot: $209 Number of Traditional Listings: 6 Monthly Traditional Rental Income: $1,420 Traditional Cash on Cash Return: 2.30% Traditional Cap Rate: 2.37% Price to Rent Ratio: 21 (high) Days on Market: 28 Walk Score: 81 5. Auburn Number of Listings for Sale: 26 Median Property Price: $339,442 Average Price per Square Foot: $191 Number of Traditional Listings: 0 Monthly Traditional Rental Income: $1,321 Traditional Cash on Cash Return: 2.20% Traditional Cap Rate: 2.28% Price to Rent Ratio: 21 (high) Days on Market: 123 Walk Score: 84 Based on the data given, homes for sale in Lewiston Maine offer the potential to generate the best possible ROI for a traditional rental property. It is characterized by the lowest median property value compared to the others on the list and the highest in terms of cash on cash return rate. While its price to rent ratio is at the higher end of the medium segment, folks are still likely to rent property in Lewiston. Top 5 Cities to Buy Homes for Sale in Maine for Airbnb Rentals According to the same source, we’ve listed the cities in Maine where cash on cash return for an Airbnb business is really high. If you’re an investor, the cash on cash return rate and the Airbnb occupancy rate are the numbers you should watch out for. 1. Hampden Median Property Price: $399,770 Average Price per Square Foot: $136 Days on Market: 34 Monthly Airbnb Rental Income: $2,268 Airbnb Cash on Cash Return: 9.92% Airbnb Cap Rate: 10.49% Airbnb Daily Rate: $115 Airbnb Occupancy Rate: 69% Walk Score: 35 2. Bangor Median Property Price: $351,057 Average Price per Square Foot: $176 Days on Market: 16 Monthly Airbnb Rental Income: $3,234 Airbnb Cash on Cash Return: 6.13% Airbnb Cap Rate: 6.34% Airbnb Daily Rate: $119 Airbnb Occupancy Rate: 79% Walk Score: 78 3. Auburn Median Property Price: $339,442 Average Price per Square Foot: $191 Days on Market: 123 Monthly Airbnb Rental Income: $2,958 Airbnb Cash on Cash Return: 5.67% Airbnb Cap Rate: 5.87% Airbnb Daily Rate: $156 Airbnb Occupancy Rate: 51% Walk Score: 84 4. Kittery Median Property Price: $773,510 Average Price per Square Foot: $538 Days on Market: 39 Monthly Airbnb Rental Income: $4,957 Airbnb Cash on Cash Return: 4.19% Airbnb Cap Rate: 4.24% Airbnb Daily Rate: $222 Airbnb Occupancy Rate: 72% Walk Score: 53 5. Lewiston Median Property Price: $301,619 Average Price per Square Foot: $188 Days on Market: 38 Monthly Airbnb Rental Income: $1,642 Airbnb Cash on Cash Return: 4.04% Airbnb Cap Rate: 4.23% Airbnb Daily Rate: $138 Airbnb Occupancy Rate: 58% Walk Score: 88 The numbers above clearly show how profitable vacation rental properties are in Maine. It’s not called Vacationland for nothing. Hampden leads the pack with a whopping 9.92% cash on cash return. Industry experts and insiders agree that a good cash on cash return is anywhere between 8% and 12%. Its occupancy rate is also a very solid 69%, which makes buying homes for sale in Hampden Maine a sound investment strategy for short-term rental investors. Related: How to Get an Airbnb Investment Property in 2022 Wrapping It Up Maine is such a promising location for real estate investors. Even if you’re just a home buyer with no intention of making money off your property, it is still a worthwhile investment. Buying homes for sale in Maine is one of the things you will not regret doing, especially if you’re an investor. However, if you do plan to come in to invest money in real estate, you need to do your homework first. Due diligence is required to make sure you get the best possible deals in the Maine real estate market. Real estate website Mashvisor can help you in this department. Its database and real estate investment tools provide investors with highly accurate ROI projections that they still continue to enjoy to this day. Find homes for sale in Maine using Mashvisor now. Sign up for a free 7-day trial today, followed by 15% off for life. Start Your Investment Property Search! START FREE TRIAL AirbnbInvestment Property AnalysisLocationReal Estate DataTraditionalVacation Rental 0 FacebookTwitterGoogle +PinterestLinkedin Alfred Lauzon Alfred is a content writer with years of experience writing about the US housing market. He has a natural inclination to the arts and creatives. One will often find him drawing, doing toy photography, or dabbling in other geeky stuff when he's not helping investors make smarter decisions. Previous Post When Will Mortgage Rates Go Down in 2022? Next Post 8 Best Markets for Investing in Single Family Homes for Sale in 2022 Related Posts Searching for Property in a Low-Inventory Real Estate Market: 6 Tips What to Consider Before Buying a Flipped House to Rent Out Buying a House As Is: A Guide for Real Estate Investors San Jose Real Estate vs. San Diego Real Estate: Which Is the Better Investment in 2018? 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