Boston is the state capital and largest city in Massachusetts. It is the most populous city in the New England region, with nearly 700,000 residents. Home to almost 4.9 million residents, Greater Boston ranks as the 10th largest metro area in the US. Despite the slower overall population growth rate, Boston has been experiencing colossal growth lately thanks to an immigration boom. This growth, along with the fact that 67.2% of the residents are renters rather than homeowners (according to NeighborhoodScout), make the Boston real estate market an ideal location for rental property investments.
Boston is regarded as the unofficial capital of New England for the economic and cultural impact it has on the entire region. It enjoys a diverse economic base, a high concentration of educated millenials, as well as an employment growth rate that is comparable to the national level. Home to prestigious universities such as MIT and Harvard, the city is one of the world’s best-known academic hubs. Nearly 100 colleges and universities are located in the Greater Boston area, attracting more than 350,000 students from all over the world and bringing a total of $4.8 billion annually to the local economy. Some of the nation’s most well-regarded teaching hospitals are based in Boston, including Brigham and Women’s Hospital, Massachusetts General Hospital, and Beth Israel Deaconess Medical Center.
Boston is a world leader in innovation and entrepreneurship as it offers entrepreneurs a friendly environment for starting a business and launching new startups. The metropolitan area is home to a number of Fortune 500 company headquarters, including well-recognized names such as General Electric and Raytheon. The financial services industry is important to Boston; the city’s financial district includes some of the country’s largest banks, mutual funds, and insurance firms. Tourism is also a major contributor to the economy. Millions of tourists flock to the Beantown each year to visit historic sites relating to the American Revolution, such as the Freedom Trail and the Boston National Historical Park. Boston’s economic base also includes biotechnology, information technology, government activities, professional and business services, manufacturing, retail, and trade.
The Boston real estate market was named one of the Top 10 U.S. Markets to Watch by PWC for the second year in a row, in its annual Emerging Trends in Real Estate: United States and Canada 2019 report. It is the highest-ranked gateway market in this year’s survey, meaning it’s the top market where real estate investments are safe and have high rates of return. According to the report, Boston is at the center of several real estate trends, like redevelopment, technology, and sustainability, and offers a number of opportunities for investment and development.
|Facts and Market Trends in Boston|
|Homes For Sale|
|Traditional Vacancy rate|
|Airbnb Occupancy Rate|
|Median Rent Price|
|Median Days on Market|
|Price to Rent Ratio|
|Average Cap Rate|
|Average Rental Income|
|Median Household Income|
|RENTAL STRATEGY||STUDIOS||1 ROOM||2 ROOMS||3 ROOMS||4 ROOMS|
The Airbnb industry in Boston is booming. Out of a total of 1.2 million Airbnb guests in the state in 2018, 465,500 people stayed in Airbnb rentals in the Boston area. The local Airbnb hosts earned a total of $101.9 million, which accounted for 40% of Massachusetts’ total Airbnb income.
In 2018, a citywide ordinance established new guidelines and regulations for short-term rentals in Boston. Airbnb Boston hosts renting out their home for 28 days or less are required to register with the city and pay the same 5.7% state tax as hotels. Under the new law, the person operating a short-term rental must actually live at the address, meaning that non-owner occupied short-term rentals are illegal. Airbnb Boston owner-operators are allowed to list either a room within their primary residence (Limited Share Unit), an entire unit available for short-term rental at their primary residence (Home Share Unit), or an adjacent unit within an owner-occupied two- or three-unit multi family home (Owner Adjacent Unit).
Short-term rental registration costs $25 for Limited Share Units, and $200 for both Home Share Units and Owner Adjacent Units, and is valid for one year. Hosts must also obtain a Business Certificate through the City Clerk’s office at a fee of $65 for Massachusetts residents and $100 for non-residents, valid for 4 years. Violation of the Airbnb regulations could result in fines.