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Multi Family Apartment in Hartford, CT
Hello All,
I am considering investing in a 14 unit apartment building in Hartford, CT. I’m looking for advice on the Hartford market in general. Is this a place that is wise to invest in if I am looking for cashlow AND appreciation?
@Jesus Orbea Like with most cities Hartford is very neighborhood/street dependent. What area of the city is the building located in?
@Michael Noto Hey Michael thanks for responding. South end between Trinity College and Wethersfield.
Average area for Hartford. C to low C tenant class.
Just make sure to have good tenant screening measures in place and very solid management that can keep tabs daily. What is the unit mix? I’d feel more comfortable with studios or 1 BRs in that area as opposed to 2 or 3 BR.
@Jesus Orbea you should speak with a local owner and property manager in the area to get their input
How are the jobs in that area? What does unemployment look like?
@Jesus Orbea South End is the more favorable part of Hartford, I would stay far away from the North End. I would reach out to @Felipe Pereria who can share his experience with properties in Hartford.
I grew up right there. My brother has some MF properties in the area, and so does my uncle and cousin. It's an interesting area, very block by block. For example you've got Trinity College right there, which is a good school. Just steps away from campus you've got Frog Hollow which is one of the worst hoods in the country (at least it was when I was growing up there in the 90's, although it has gotten a little better). If the building is somewhere Trinity kids or University of Hartford students would want to live it could be a good play. However if it's got locals living in it, different story and really depends on the street.
Appreciation has been pretty flat over the past several decades within Hartford, but in the past few years it has actually picked up a little bit and is at least keeping up with inflation now. Cash flow can be good if you manage well, and have affordable maintenance and repair people.
As far as the Hartford market in general goes, I'll give you a little background. A lot of people don't know this, but Hartford was once the place everybody wanted to be. This was in the late 19th century, when its factories cranked out guns (Colt, Gatling, Browning, Sharps), tools (Stanley), clothing, textiles, cars (Pope), bikes (Columbia) and all kinds of goods. It became the wealthiest city in the country for a while during and after the Civil War. It was also the center of publishing and an intellectual hub at this time (Mark Twain, Harriet Beecher Stowe, Frederick Law Olmsted, Wallace Stevens). This made it a great place to be. Historians call it the "Silicon Valley of the 19th Century". Many advancements in manufacturing technology were made there, the city was flush with startup capital, and it became a magnet for the brightest minds who wanted to be on the cutting edge.
Hartford has been circling the drain ever since then. Today, the macro economics/demographics are not what most investors are looking for. Don't get me wrong, people are definitely investing there successfully, but as far as comparing it to other markets goes, it doesn't perform very well with the metrics most people are looking for: growth market with a strong economy, diverse job market, affordability (residents make enough to be able to buy property, which drives property values up), good schools and an increasing population. Sadly, Hartford is the opposite of all that as it has been in post-industrial terminal decline for a long time, without much hope of real change coming anytime soon.
Pros:
Favorable price to rent ratios.
Low barrier to entry/Property values are low compared to other markets.
Rents are skewed high because many renters have subsidized housing vouchers/Section 8.
High percentage of the population is made up of renters (Good rental market).
Cons:
High property taxes!! (and rapidly getting higher).
Rough tenant base.
Aging stock: buildings date back to the 1700's, many have deferred maintenance or are approaching physical obsolescence.
Declining population.
High crime: pretty sketchy by most people's standards, consistently ranks top 10 worst US cities for crime.
High poverty rate/High unemployment (Section 8 is a must)
Tenant-friendly laws (3-6 months on average for a simple eviction, $3-5k not including lost rent).
Corrupt/Jacked-up/inefficient local government. The city almost went bankrupt a few years ago, but was bailed out by the state last minute. Politics are kind of a mess. Every few years a new mayor is elected who promises to revive the city, but they usually end up in jail for something instead.
I'd actually recommend avoiding Hartford altogether. East Hartford, Middletown, Manchester and New Britain are better markets if you must invest in the area. New Britain is also very block by block though, so it's important to be careful and really know the area well. Make sure you have good management, a guy for evictions, and know that there are parts of town where it will be difficult to impossible to get anyone to manage your property (North End).
Originally posted by @Steve K.:I grew up right there. My brother has some MF properties in the area, and so does my uncle and cousin. It's an interesting area, very block by block. For example you've got Trinity College right there, which is a good school. Just steps away from campus you've got Frog Hollow which is one of the worst hoods in the country (at least it was when I was growing up there in the 90's, although it has gotten a little better). If the building is somewhere Trinity kids or University of Hartford students would want to live it could be a good play. However if it's got locals living in it, different story and really depends on the street.
Appreciation has been pretty flat over the past several decades within Hartford, but in the past few years it has actually picked up a little bit and is at least keeping up with inflation now. Cash flow can be good if you manage well, and have affordable maintenance and repair people.
As far as the Hartford market in general goes, I'll give you a little background. A lot of people don't know this, but Hartford was once the place everybody wanted to be. This was in the late 19th century, when its factories cranked out guns (Colt, Gatling, Browning, Sharps), tools (Stanley), clothing, textiles, cars (Pope), bikes (Columbia) and all kinds of goods. It became the wealthiest city in the country for a while during and after the Civil War. It was also the center of publishing and an intellectual hub at this time (Mark Twain, Harriet Beecher Stowe, Frederick Law Olmsted, Wallace Stevens). This made it a great place to be. Historians call it the "Silicon Valley of the 19th Century". Many advancements in manufacturing technology were made there, the city was flush with startup capital, and it became a magnet for the brightest minds who wanted to be on the cutting edge.
Hartford has been circling the drain ever since then. Today, the macro economics/demographics are not what most investors are looking for. Don't get me wrong, people are definitely investing there successfully, but as far as comparing it to other markets goes, it doesn't perform very well with the metrics most people are looking for: growth market with a strong economy, diverse job market, affordability (residents make enough to be able to buy property, which drives property values up), good schools and an increasing population. Sadly, Hartford is the opposite of all that as it has been in post-industrial terminal decline for a long time, without much hope of real change coming anytime soon.
Pros:
Favorable price to rent ratios.
Low barrier to entry/Property values are low compared to other markets.
Rents are skewed high because many renters have subsidized housing vouchers/Section 8.
High percentage of the population is made up of renters (Good rental market).
Cons:
High property taxes!! (and rapidly getting higher).
Rough tenant base.
Aging stock: buildings date back to the 1700's, many have deferred maintenance or are approaching physical obsolescence.
Declining population.
High crime: pretty sketchy by most people's standards, consistently ranks top 10 worst US cities for crime.
High poverty rate/High unemployment (Section 8 is a must)
Tenant-friendly laws (3-6 months on average for a simple eviction, $3-5k not including lost rent).
Corrupt/Jacked-up/inefficient local government. The city almost went bankrupt a few years ago, but was bailed out by the state last minute. Politics are kind of a mess. Every few years a new mayor is elected who promises to revive the city, but they usually end up in jail for something instead.
I'd actually recommend avoiding Hartford altogether. East Hartford, Middletown, Manchester and New Britain are better markets if you must invest in the area. New Britain is also very block by block though, so it's important to be careful and really know the area well. Make sure you have good management, a guy for evictions, and know that there are parts of town where it will be difficult to impossible to get anyone to manage your property (North End).
What a fantastic description of Hartford overall. Thanks for taking the time to write this one up. I have debated about investing there for quite some time but your points above have always steered me off.
@Jesus Orbea There have been a lot of great points made on this thread about Hartford so I think you are well equipped with information. However, I will also provide my perspective.
I think Hartford is without a doubt a market you can be successful in, but you really need to have boots on the ground and a solid team. There are some great developments happening around Hartford that are making it more appealing. For example Parkville Market just opened and is doing well. You can read more about it here.... https://parkvillemarket.com/.
There have also been some popular breweries to pop up around the town. I'm hopeful going forward we will see a shift going forward. I don't see the 'north end' being an area worth investing in anytime soon. The 'west end' is currently the best part of the city with the 'south end' next from an investment standpoint.
@Steve K. Love the post. Would also add to your list of "Cons" horrible city/state planning with highways constructed along river (destroying valuable riverfront) and aging viaduct through heart of Hartford (separating 10,000 Aetna employees from downtown) which I believe has been one of the biggest detractors from the state. Hartford has definitely a rich history, some gorgeous infrastructure in parts showcasing its former glory but deferred maintenance is probably rampat. Hartford was making a comeback with great programs at the Bushnell, really trying to attract young people, but COVID really hurt the city, numerous hotels closed, gonna hurt the city more than others. Connecticut is scaring away big time employers each year (recently GE), truly a 9 to 5 not a 5 to 9 city although you may find good rent to value because of this, but i'd be aiming for 1.5% - 2% rule where normally people are looking for the 1%. UCONN moving into South End with new infrastructure, stay close to that, that would provide the only glimmer of hope in my eyes where to find an investment opportunity in the city, but with anything, you can make it work if you buy it right and manage it right! Good Luck!
Hi @Jesus Orbea,
As a new investor, you need to know your numbers, cold.
Whether you hire out everything or are more involved, plan from the beginning to be able to step away from the business if you need to.
That requires careful analysis of the property BEFORE you buy, to determine if it meets your financial goals AFTER including all expenses.
If any turn key company sends you a cashflow analysis without at least TIMMUR:
1. Taxes,
2. Insurance,
3. Management,
4. Maintenance,
5. Utilities,
5. Repairs
Then run for the hills.
In Bridgeport, Connecticut and many North East regions we also include Snow Removal and Pest control.
Explore all markets but do your research, as to where net migration and jobs are heading.
Let me know if you have any questions, feel free to shoot me a message.
- Craig
@Steve K. Wow thanks a ton for this post and all the valuable information. Much appreciated!
@Jesus Orbea I am also looking into the Hartford CT area. Would you like to connect sometime virtually?
I would echo a lot of what has already been said. I don't disagree with any of it.
I think you're better off in the burbs around Hartford. Mostly because (certainly in the short run) there aren't many reasons for people to want to live in an apartment there. For the same money you can live in the next town over, and have less likelihood of crime, better schools for your kids, and if you are gainfully employed, most of the office jobs in the city have either gone away or they’re now remote anyway.
I love Hartford, and there are some beautiful homes as well as apartments there, but the typical MF building is not going to be in a great neighborhood, and demand will be low until the city gets its act together economically.
Hats off to you @Steve K. - Brilliant post!
Thank you for the tag @Patrick Fanning, I really appreciate it.
Hartford can work for you if you go in with the right expectations @Jesus Orbea. You have to go in knowing that most PM companies won't be too excited by anything outside of the west end or the south end, and even then it will depend on the street and what the immediate surroundings look /feel like.
I've been in Hartford (the city and the county) for four years and within that time I've decided I'd much rather be in the suburbs of Hartford. CT has a lot of rental markets, and Hartford county contributes to that. You will spend a bit more in the suburbs, but you will get a better tenant with a higher chance for appreciation. Hartford may cashflow but your vacancy will be higher (if you seek quality tenants), your taxes will be higher and the value will remain pretty flat.
Quote from @Steve K.:
I grew up right there. My brother has some MF properties in the area, and so does my uncle and cousin. It's an interesting area, very block by block. For example you've got Trinity College right there, which is a good school. Just steps away from campus you've got Frog Hollow which is one of the worst hoods in the country (at least it was when I was growing up there in the 90's, although it has gotten a little better). If the building is somewhere Trinity kids or University of Hartford students would want to live it could be a good play. However if it's got locals living in it, different story and really depends on the street.
Appreciation has been pretty flat over the past several decades within Hartford, but in the past few years it has actually picked up a little bit and is at least keeping up with inflation now. Cash flow can be good if you manage well, and have affordable maintenance and repair people.
As far as the Hartford market in general goes, I'll give you a little background. A lot of people don't know this, but Hartford was once the place everybody wanted to be. This was in the late 19th century, when its factories cranked out guns (Colt, Gatling, Browning, Sharps), tools (Stanley), clothing, textiles, cars (Pope), bikes (Columbia) and all kinds of goods. It became the wealthiest city in the country for a while during and after the Civil War. It was also the center of publishing and an intellectual hub at this time (Mark Twain, Harriet Beecher Stowe, Frederick Law Olmsted, Wallace Stevens). This made it a great place to be. Historians call it the "Silicon Valley of the 19th Century". Many advancements in manufacturing technology were made there, the city was flush with startup capital, and it became a magnet for the brightest minds who wanted to be on the cutting edge.
Hartford has been circling the drain ever since then. Today, the macro economics/demographics are not what most investors are looking for. Don't get me wrong, people are definitely investing there successfully, but as far as comparing it to other markets goes, it doesn't perform very well with the metrics most people are looking for: growth market with a strong economy, diverse job market, affordability (residents make enough to be able to buy property, which drives property values up), good schools and an increasing population. Sadly, Hartford is the opposite of all that as it has been in post-industrial terminal decline for a long time, without much hope of real change coming anytime soon.
Pros:
Favorable price to rent ratios.
Low barrier to entry/Property values are low compared to other markets.
Rents are skewed high because many renters have subsidized housing vouchers/Section 8.
High percentage of the population is made up of renters (Good rental market).
Cons:
High property taxes!! (and rapidly getting higher).
Rough tenant base.
Aging stock: buildings date back to the 1700's, many have deferred maintenance or are approaching physical obsolescence.
Declining population.
High crime: pretty sketchy by most people's standards, consistently ranks top 10 worst US cities for crime.
High poverty rate/High unemployment (Section 8 is a must)
Tenant-friendly laws (3-6 months on average for a simple eviction, $3-5k not including lost rent).
Corrupt/Jacked-up/inefficient local government. The city almost went bankrupt a few years ago, but was bailed out by the state last minute. Politics are kind of a mess. Every few years a new mayor is elected who promises to revive the city, but they usually end up in jail for something instead.
I'd actually recommend avoiding Hartford altogether. East Hartford, Middletown, Manchester and New Britain are better markets if you must invest in the area. New Britain is also very block by block though, so it's important to be careful and really know the area well. Make sure you have good management, a guy for evictions, and know that there are parts of town where it will be difficult to impossible to get anyone to manage your property (North End).
Hi guys,
Newbie from NY, looking in to invest in the Hartford multi family market, I see here pretty much discouraging of entering the market there, does anyone know if anything has changed in these past 12 months?