Thinking about buying a 3-family in Boston? If you’re looking for a great ROI consider investing in the Dorchester area. This Boston neighborhood allows for better cash flow than any other neighborhood in the city. Prices are still relatively low compared to other neighborhoods, but the rental market is very strong. Rental prices have been headed upward for the past few years and the demand for available units is high. Here is a quick look at some of the averages and how this scenario could play out in the Dorchester market.
Average Price for 3 Family Home: $550,000
20% Down Payment $110,000 – Interest rate of 4% on a30 year fixed
Mortgage payment of $2100.00 per month
Mortgage $2100 + Taxes $350 + Home Insurance $200 + Water & Sewer $150 = $2800 Monthly Expenses
Market Rent For 3 Bedroom Dorchester Apartment = $1600 * 3 Units = $4800 Monthly Income
$4800 - $2800 = Monthly Cash Flow of $2000 or $24,000 Annually
These numbers equate to a Return on Investment of nearly 22%, which is tough to find in other markets. There are some assumptions here that will lead ROI numbers to be slightly better or worse depending on each particular investment, but the overall averages speak for themselves.
Don’t let your lack of knowledge for Dorchester real estate steer your away from this great market. There are many local professionals that can assist you in locating great properties in the neighborhood. Like any real estate market, not every property will be a great investment, but when you take the time to do a little market research you can understand which properties will perform well.