Possibly investing in Berlin NH

[Brian Plowman]

My business partner has family in the Berlin NH area and brought up the idea of possibly acquiring some rental properties there. I am not proficient in the area and honestly have no idea what rents might go for or what the vacancy rates are. Any insight would be greatly appreciated! 

Thank you

[James S.]

Hi Brian,

I am not from Coos County, so take what I say with a giant grain of salt. I am not sure how familiar you are with Berlin as a city, so let's look at a few facts. As you may know, Berlin suffered a huge blow with the paper mills largely closing up shop in the area. A drive through the city will show you just how much of an effect it's had on the area. The best areas of Berlin look like 'C' Areas, to me. The city is broke, it's citizens are broke, and there is no real hope on the horizon of a turnaround, despite moving a prison up there. Unemployment is still nearly 8%, twice the NH average. Housing prices are the cheapest in NH. It's losing population, and job growth is projected at -4%. It has one of the lowest houshould wages in the state, at 38,000+/-. That ranks 227 out of 238 in NH. 

No doubt the allure of $10,000 triplexes are enticing, I know they are to me. Your risk tolerance, and desire to deal with problem tenants will dictate whether you want to invest there. I have no doubt people are making money. Keep in mind it's very isolated from the rest of us; hard to check on your property manager, if you can find a decent one. 

Also, off the record, I've been told by more than one official that NH welfare services tell people to move to Berlin all the time, because it is one of the only places they can realistically afford in NH. There are very few areas in the seacoast a poor person can live, and the 1-93 corridor is not that much better. So, you're going to have a lot more headache tenants, and you aren't going to make that much off their low rents, since demand is so low. Also, Berlin is seriously suffering for tax revenue, and in NH that only means one thing, rising tax rates. There aren't many more services to cut in Berlin (there is enough deferred maintenance there already), so higher taxes are the inevitable byproduct of that. 

Just my two cents, I'm sure there are people here making money in Berlin.