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Updated 9 months ago on . Most recent reply

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Bala Nagarajan
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Seeking Advice on Building an Additional Unit on Multifamily in Canton,MA

Bala Nagarajan
Posted

I'm a first-time homebuyer and recently purchased a multifamily property in Canton, MA for close to $900K. The property, built in 1875, has two units, each approximately 1200 sqft. I have been living and renting the other. Additionally, there is around 0.4 acres of vacant land at the back of the house.

I'm considering constructing either one or two additional units on this vacant land and renting them out. After inquiring with the town, it seems the chances of getting zoning approval for one unit are higher than for adding two units. If I proceed with adding one unit, around 1500 sqft, the construction and approval costs may amount to approximately $450K, which would bring the total property value to around $1.35 million.

Given that some three-unit properties in Canton have sold for less than $1 million in the last two years, I'm uncertain whether adding this one unit and renting it out would be a wise investment.

My questions are:

  1. Is adding a single unit worth the investment considering the current market trends in Canton, MA?
  2. Would the rental income from the additional unit justify the $450K investment?
  3. Are there alternative investment strategies I should consider for this vacant land to maximize its potential value?

I would greatly appreciate any insights or advice from those with experience in similar projects or knowledge of the Canton,MA real estate market.

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