How is the real estate in RI

Question

To anyone living In Rhode Island how is the real estate market down there. I live in Mass and house prices are outrageous here. When I look in towns like Woonsocket I see houses for very cheap.

Anthony Thompson · Answer

@Woodly Tisme it’s not bad, not nearly as expensive as the Boston market of course, but our economy is also weaker than Boston. I suspect houses in both states are starting to sell for unsustainable prices, but I’ve had that feeling about Mass longer than RI.

Yes, Woonsocket is relatively cheaper, but it’s also a tougher area too and it’s not really in any main corridor of economic activity. There’s been talk of a “train coming down from Worcester” for a while now, but so far it’s just talk, and I still don’t see any direct connection to the main economic hub (Boston). To me the main economic activity of Woonsocket is the Section 8 housing program.

As always, it comes down to hard factors like the numbers (whether the purchase price is viable given the expected rents and expenses) and soft factors (such as general building quality, neighborhood quality, tenant quality, whether it would be a long distance rental for you or you’re in the area, expected future economic activity and appreciation, etc.)

Yes, prices may be a lot cheaper, but so are rents. So you need to take both factors into account at look at rate of return and then consider softer factors like some of the ones I mentioned, and decide whether the whole picture still makes sense going into another market (RI).

The same thing happened last cycle by the way. House prices shot up further and faster in the Boston market so a lot more money could be made, until the market turned, when those properties had farther to fall, too. RI never experienced nearly as much appreciation, but it also had a lot less to fall. So besides your own situation (what you can buy and where you can or want to buy) it’s also worthwhile considering market cycles and what happened the last time around too.

Brandon Ingegneri · Answer

I own several in Woonsocket and can attest that the cost of entry is definitely more attractive in Woonsocket.  However, appreciation occurs at a much lesser rate than other municipalities and markets.  Rents are definitively lower as compared to other cities and towns that I have rentals in.  Woonsocket does have a heavy tax burden on property owners.  In addition to high property tax rates and high insurance premiums given the city demographics and ISO ratings, there is a relatively expensive sewer tax, and private trash service is required on properties with 4 or more units.  When you add it all up and take into account the market rents, you still need to hammer out a good deal and make your money on the purchase.

Colleen F. · Answer

@Woodly Tisme  you don't list your location in your profile.   MA and RI vary widely by region in cost and character. I invest in RI but currently live in MA. Rhode Island has cheaper housing then MA in general but unemployment in RI is historically higher then MA.  What Anthony says about rents is a good to consider for an area.  If you are looking at a rents twice as high  in some areas of MA you have to run the numbers to see what money you have to put in to get that in RI to get a real comparison.   The regional specifics may be more relevant then a state-wide comparison.   Especially when it comes to making sure the area you invest in has some sort of economic engine. Woonsocket is somewhat like Worcester, I don't think it has seen the price increases because it isn't a strong area for jobs but probably some areas worth investing in. Southern rhode island is nice but pricier similar to areas of MA.

Brian J Allen · Answer

@Woodly Tisme . I echo Colleen on this.  Make sure you know where you are in relation to what you are investing in.  Your ability to do work or manage the property is often dependent on your location.  The further away the more you need to rely on others.  Im close to both Worcester and Woonsocket, RI, but i choose Worcester as i am there more often and i have better networks in the area.  I do think the price point in Woonsocket is Better, and you may make more money year over year, but MA historically does better than RI in terms of jobs.

Woodly Tisme · Answer

@Anthony Thompson yes. Woonsocket seems to be a very low income area. I see decent houses in the 200k range. Some of them look quite nice. Where I am you won’t find a house for less than 400k. It’s gotten way overpriced here. The closer you get to Boston the more expensive it gets.

How is the real estate in RI

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