Rhode Island multi family Market

[Sean Doherty]

Hey everyone, 

Im brand new, still searching for my first multifamily deal. My plan is to buy and hold and I am wondering what you guys think are good areas in Rhode Island for this strategy. I live in Massachusetts so I don't know RI to well but have recently started working along the MA/RI border.  

My thoughts are Cranston seems like a nice area and if I remember correctly had a positive pop. growth rate when I checked citydata.com. Other areas I've searched and have positive growth rates and relatively low crime on citydata.com are Warwick, West Warwick, Cumberland, and North Providence. I have looked a little bit in Pawtucket but I'm not to confident Pawtucket is a great place to be. I have searched in Providence but I do not know the neighborhoods at all yet, so the couple open houses I went to ended up being in what seemed like sketchy areas. One was on Ralph Street in Providence, what do you guys think of that neighborhood? It looks like it may be considered to be in the Silver Lake area.

Like I said I'm brand new so my insights may be way off but I'm curious to hear what everyone else thinks of the different RI areas.

[Anthony Thompson]

@Sean Doherty Cranston is generally good, though the areas bordering on Providence can sometimes be not-great. Prices are higher of course, especially in Western Cranston which doesn't have as many rentals - my guess is the #s aren't generally going to work well for investments in Western Cranston.

Warwick is OK but has had a number of school closings over the past few years so I view it as a riskier investment. I grew up in Warwick but unfortunately the consensus I've started picking up is that it seems to be a step down from Cranston - though I'm sure plenty of people would disagree. Still a decent area though, and for investments it might be a good mix of area quality vs. investment return, especially as I don't get the sense a lot of people look in Warwick specifically.

Pawtucket has several not-great areas, and the problem is that "everyone" (or just about everyone, it seems to me) targets Pawtucket multi-family properties saying, "it's close to the T!". Yes it is, but when everyone uses the same rationale to pursue things in Pawtucket, it makes the prices shoot up. So I think Pawtucket is good for sheer # of rental properties (supply), but I would be careful with the #s just because the demand has caused prices to increase so much, and definitely drive by any potential Pawtucket property both day and night since there are some tough parts of Pawtucket.

Cumberland is great, again not a lot of rentals (like Western Cranston), you'll pay more but generally higher quality. As long as the #s work Cumberland is pretty good.

North Providence is the land of condos (LOL). Lots of rental supply there, generally the areas are a little tougher and definitely "rental quality" but for the most part not too bad, certainly not like South Providence or Olneyville toughness. More like B-C, whereas Cranston is a solid B trending to A in Western Cranston and with some C where it borders Providence. I haven't done a ton in Cumberland to comment on specific areas per se but generally I think of it as generally B with some A areas and a few C areas down where it borders Central Falls.

West Warwick is tougher, generally C, plenty of rentals and generally rental quality. Like Warwick, I don't know too many people who target WW specifically. If you don't mind working class, thoroughly C areas, I think West Warwick has a lot of promise. But it is farther away for someone who's investing from Massachusetts. Even if you hire a property manager, it's nice to be able to drive by occasionally to check up, and West Warwick would add at least a half hour each way compared to, say, Pawtucket or North Providence.

Hope this helps!