If you’ve been thinking about buying your first home or considering an investment in Real Estate, now may be a good time to purchase a local multi-family home. With depressed Real Estate prices, historically low mortgage rates, and an increased demand for rental units, the current Real Estate market has created a perfect storm for new landlords.
Over the last year, the Boston rental market has experienced a huge jump in demand. Boston landlords are achieving higher rents, while also experiencing less vacancy time. According to MLS Pin, at this time last year, the average Boston apartment in was renting for $2,232 vs. a current day asking price of $2,679. That’s a $447 difference and nearly a 20% increase. The number of days apartment rentals are staying vacant has also been cut down significantly. Our current average rental unit DOM (days on market) is approximately 41 days, compared to 58 days this time last year. Not only are Boston rentals bringing in more income, but they are bringing in tenants on an average of 17 days sooner.
I regularly speak with many would-be buyers that are sitting on the sidelines in this great buyers market. These buyers seem to be waiting for national headlines to tell them that it’s O.K. to buy a home again. Savvy buyers and investors understand that Real Estate trends, and therefore values, are local in nature and not necessarily affected by what happens on the national stage. Make sure you are one of these buyers and educate yourself on what’s happening locally. For income producing property you also want to look at the cash flow being produced. Stronger rents typically mean stronger cash flow and therefore stronger home values.
When you see rents on the rise and DOM slimming down, combined with the fact Boston has always been a great place to live, it’s hard to produce a good reason why now wouldn’t be a great time to be a local landlord.