Is There a Future in Build to Rent in Worcester?

[Brian J Allen]

This may seem like a surprising topic when you think about Worcester. After all, building in Worcester is challenging due to limited land availability. Unlike cities like Phoenix or Las Vegas, where there is ample undeveloped land, Worcester's development must work within existing constraints.

Currently, some of my clients are effectively participating in Build to Rent by default. They purchase properties, rehab, or build with the hope of increasing the value, and then find themselves holding onto these projects and renting them out when they can't find another suitable investment. This isn't always their initial plan, but it often turns out to be a profitable strategy.

Several clients have considered buying condos to rent due to the lower maintenance requirements. However, they quickly realize that condo fees can significantly impact profitability. As a result, many have shifted their focus to purchasing attached single-family homes or fully rehabbed multifamily properties. These options allow them to control expenses better, attract similar tenants, and often achieve higher rents with lower costs.

I believe there is a promising market for purpose-built attached single-family homes for rent in Worcester. There is demand for this type of housing, and buyer-landlords can achieve a decent return on investment with new properties while benefiting from long-term appreciation.

While Worcester may not offer the vast expanses of land seen in other cities, thoughtful development and strategic investment in Build to Rent projects can meet the needs of residents and provide solid returns for investors.

[River Sava]

Hi Brian - 

Thanks for the insights on Worcester's challenges and opportunities. I have also seen people show interest in condos and then realizes the fees/headache associated. I agree that thoughtful development can definitely meet demand and provide solid returns. As someone from Newburyport, I see similar trends in greater Boston and agree that strategic investment is key (espeically with tightening restrictions). Thanks for sharing!

[Account Closed]

Investors initially aiming to flip properties are now becoming landlords due to market conditions. Attached single-family rentals are especially promising due to lower maintenance costs and higher rental yields.

But now think of the families who wouldn't want to live in such conditions, I think there is a future, because demand is no where to be finishing

[Asim Ghani]

The cost to build has gone way up in the past 3 to 4 years. Worcester is no different. I have seen wholesalers trying to market a buildable lot in Worcester for $80,000. When you consider the cost of construction, permits, interest on private loan and etc, it just doesn't justify the ROI. I may be wrong, but that may be the reason, Worcester doesnt have any developers unless its a 100 plus unit development.

[Brian J Allen]

@Asim Ghani thank you for your comment.  I think one of the problems with Worcester is that it is TOO EASY to develop small.   All the mom and pop people just get a lot build two attached homes, live in one for a year and then sell them both, then go do it again.  There aren't very many large parcels left where you can do a development.  And at the same time as you mention the cost is close to the same as Boston and you don't make as much $ as a developer.  So people are just doing infill lots and chopping lots off of existing buildings to find more lots to build something