Choosing Massachusetts or Rhode Island? (Boston vs Providence)

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Choosing Massachusetts or Rhode Island? (Boston vs Providence)

Account Closed
Columbus, OH · Member since 2016 · 35 posts · 8 votes

Hi everyone. I grew up in East Providence, RI and currently live in Medford, MA. I, like most investors, am trying to maximize my return, minimize my risk, and grow my business. However, I am having an issue with deciding which market I want to really settle in, and I need the communities help with this one.

I am looking at all of this through a buy and hold cash flow approach of 2-4 unit multi-families. While Boston seems to be constantly "booming", I am afraid of very low ROI. Providence on the other hand offers a little better ROI due to extremely low prices, but is known to be not tax friendly and, on the surface, doesn't seem to have much growth potential. There are many conflicting views on the internet as well with both cities, with some sources saying Providence will turn into a hot market.

I would love anyone to offer their two-cents, personal experiences, and any other knowledge on this matter.

My other question pertains to research. What is the best approach to researching these particular topics in real estate? What are some red flags in a market, and is any market in general considered safe to invest in as long as they don't have any big red flags?

Thank you all in advance!

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Brandon Ingegneri
Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
10y
Your asking the wrong question. Forget which market to invest in. Hunt for deals in both markets and then evaluate the deal. The second you limit or restrict yourself in this business is the day that you are making less money than you could potentially be making. A deal in Boston may have a higher acquisition price than Providence, but if a deal is a deal in its respective market, it's still a deal. Things to consider though... Where is your network? Where and who are your resources? Where are you finding deals? Once you answer these questions, you'll know where you may initially be doing work, but don't make the mistake of being confined to a single market.
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  • Jerry Batista
    Developer · RI · Member since 2014 · 19 posts · 5 votes
    10y

    Hey Corey, I am a Rhode Island native and actually just bought a multifamily in East providence, RI. Don't know much about Boston, but with all the construction and planning that's been approved, I think we are about to see some change here. Good luck!

    0Reply
  • Stephen RenehanPro Member
    Providence, RI · Member since 2016 · 73 posts · 36 votes
    10y

    Jerry,

    Hopefully, you are correct!

    Stephen

    0Reply
  • Ricky Beliveau
    Investor · Boston, MA · Member since 2015 · 107 posts · 41 votes
    10y

    @Account Closed I have been purchasing rental properties around Boston since 2010 but have switched to condo conversions due to the cap rates/ROI's becoming not as favorable.

    I just purchased my first two 3 family buildings in Providence last month due to the impressive cap rate opportunities that I discovered.

    My advise is talk to as many Managmemt companies/agents as you can in an area you are interested in so you really understand the rental rates as well as vacancy.

    Hope this helps.

    1Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2016 · 35 posts · 8 votes
    10y

    @Jerry Batista Thank you for your insight. Let's hope the new construction does help!

    @Ricky Beliveau Your advice does help. I am going to try to contact as many agents and management companies to learn more about the areas.

    0Reply
  • John Pauler
    Investor · Somerville, MA · Member since 2015 · 34 posts · 7 votes
    10y

    @Account Closed I can't compare and contrast Boston to Providence, as I'm only active in the Boston area (Somerville to be specific). 

    This is an interesting resource for a quick overview of prices in different areas around Boston, published in early May. You'll notice everything seems pretty expensive already, but there are a few areas where prices are lagging others. Note Malden Center and Oak Grove, in particular. These are both on the Orange line, which gets you downtown very fast. Both are not too far from you in Medford. High quality renters, as well as potential buyers, will continue to be priced out of the downtown Boston/Cambridge/Somerville markets, and this should drive solid price appreciation in Malden as folks flock here as a relatively inexpensive place to live where you can still work downtown and take public transportation. 

    Disclaimer: I only own property in Somerville (but I am looking in these two areas, particularly Malden Center)

    0Reply
  • Bruno C.Pro Member
    Rental Property Investor · Providence, RI · Member since 2013 · 120 posts · 41 votes
    10y
    Originally posted by @Account Closed:

    Hi everyone. I grew up in East Providence, RI and currently live in Medford, MA. I, like most investors, am trying to maximize my return, minimize my risk, and grow my business. However, I am having an issue with deciding which market I want to really settle in, and I need the communities help with this one.

    I am looking at all of this through a buy and hold cash flow approach of 2-4 unit multi-families. While Boston seems to be constantly "booming", I am afraid of very low ROI. Providence on the other hand offers a little better ROI due to extremely low prices, but is known to be not tax friendly and, on the surface, doesn't seem to have much growth potential. There are many conflicting views on the internet as well with both cities, with some sources saying Providence will turn into a hot market.

    I would love anyone to offer their two-cents, personal experiences, and any other knowledge on this matter.

    My other question pertains to research. What is the best approach to researching these particular topics in real estate? What are some red flags in a market, and is any market in general considered safe to invest in as long as they don't have any big red flags?

    Thank you all in advance!

     I have investment property both in Providence and Boston. In general, Boston's market is an order of magnitude stronger economically. However, if you can find the right teams to grow with, you can definitely invest in the Providence area. 

    In Boston, there's still a lot of opportunity, even in places like East Boston which has transformed in recent years.

    Overall my general thought is that Providence's economy is a byproduct of Bostons and flex as Boston's economy does. That would be my biggest red flag, but it is not a deal breaker.

    1Reply
  • Brandon Ingegneri
    Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
    10y
    Your asking the wrong question. Forget which market to invest in. Hunt for deals in both markets and then evaluate the deal. The second you limit or restrict yourself in this business is the day that you are making less money than you could potentially be making. A deal in Boston may have a higher acquisition price than Providence, but if a deal is a deal in its respective market, it's still a deal. Things to consider though... Where is your network? Where and who are your resources? Where are you finding deals? Once you answer these questions, you'll know where you may initially be doing work, but don't make the mistake of being confined to a single market.
    3Reply
  • Anthony ThompsonPro Member
    Buy and Hold Investor · Cranston, RI · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    Those are good points, @Brandon Ingegneri. I'd also add, there are a lot of advantages to picking property that is close to where you live, or where you spend a lot of time (e.g., your office).

    Besides the obvious comfort factor, there's a big convenience factor - if you're going to hold onto the property, you'll need to be over there every so often for one thing or another.

    It really helps reduce the "mental barrier" when the property is close by; it changes it from "on my way home" to "something that's out of my way, when can I fit that into my schedule this week?"

    1Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2016 · 35 posts · 8 votes
    10y
    Brandon Ingegneri I really like the points you made, and you are absolutely right. I shouldn't confine myself to a single market. I guess I asked the question out of fear of becoming too invested in Providence and having it fail because it is not as economically sound. I do still want to focus most of time in one market for now simply because I do not have much of a network or resources. Most of my initial time will be spent building those, and I guess I wanted to just focus on one market for now.
    0Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2016 · 35 posts · 8 votes
    10y
    Bruno C. Thank you for the reply, and I will definitely look into how the economy in Providence relates to that of Boston's. Anthony Thompson Thank you for your response. I will most likely be moving to the Attleboro area for work within the coming months so I'll have the luxury of being close to both markets!
    0Reply
  • Brandon Ingegneri
    Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
    10y
    Anthony Thompson is correct. And thanks Anthony. If you are managing these properties yourself, you have to be in the loop as to what is going on with them. This helps nip issues in the bud and prevents small issues from compounding. Every property that I own and manage, I make sure I drive by or walk around 2 times per week regardless. Makes it much easier to stay on top of things.
    1Reply
  • Brandon Ingegneri
    Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
    10y
    That makes total sense Corey Carvalho Your asking the right questions. Your just firing with buck shot. Break it all down and you'll find the smaller questions that answer the larger ones. You'll be fine. Regardless of where it is, it'd you buy it right, you'll be okay.
    0Reply
  • Paul Timmins
    Specialist · Rockland, MA · Member since 2010 · 7k+ posts · 2k+ votes
    10y

    @Account Closed

    Check out the local REIA's for local info. There is a good meeting in Warwick Waltham Black Diamond.

    Paul

    0Reply
  • Marc Carlson
    Real Estate Agent · Riverside, RI · Member since 2014 · 70 posts · 28 votes
    10y

    @Account Closed 

    I would be happy to help if I can.  I am a real estate agent in Rhode Island, and new to investing.  The rental market is good, but finding a deal can be challenging, but can be done.  

    I would love to connect and talk about real estate.

    Marc

    0Reply
  • Fan Bi
    Investor · Boston, MA · Member since 2016 · 91 posts · 45 votes
    10y

    Had been looking for buy-and-hold MFs in Boston (mostly Eastie and Southie) for the first six months of 2016, but couldn't find anything that came to cash-flowing. Just closed on a place in Eastside Providence, and actively working on a second MF in the area.

    Curious to learn from vets here; what areas are people looking at in RI?

    0Reply
  • Stephen Torti
    Investor · Providence, RI · Member since 2016 · 142 posts · 40 votes
    10y
    Just read quick but PayPal may be taking over the superman building. Rent on the up 👍
    1Reply
  • Anthony ThompsonPro Member
    Buy and Hold Investor · Cranston, RI · Member since 2013 · 1k+ posts · 1k+ votes
    10y

    Ok @Stephen Torti first I had to check the calendar to see if it was April 1st, because I couldn't imagine a business willingly choosing to open a new location in Rhode Island :)

    But it is apparently one of the locations they're considering; from http://wpri.com/2016/09/01/paypal-eyeing-superman-...

    "Multiple people with direct knowledge of the discussions confirmed that the Superman building is in the mix for PayPal, but they also emphasized that the company has not chosen Rhode Island yet and cautioned that its executives have scouted a number of potential locations around the state."

    Even better, at the end of the article it says

    "PayPal would be the second major company to announce an expansion into Rhode Island in recent months, following General Electric, which announced plans earlier this year to open a new GE Digital office in Providence."

    1Reply
  • Stephen Torti
    Investor · Providence, RI · Member since 2016 · 142 posts · 40 votes
    10y
    Haha Anthony Thompson I know and honestly if Gina can land this. Good for her, huge coup
    0Reply
  • Account Closed
    OP
    Columbus, OH · Member since 2016 · 35 posts · 8 votes
    10y
    I'm really glad to see responses still coming in here :) definitely enjoying this discussion and I thank everyone for participating. Since this post, I have been looking into Attleboro, as it is a nice city with close proximity to Providence and Boston. While it is not expecting any boom anytime soon, I do not see it declining. It seems to have nice inventory and can provide cash flow. The news of these potential companies moving into Rhode Island will be great for the state and for places like Attleboro.
    1Reply
  • Debbie Roberts
    Real Estate Agent · Attleboro, MA · Member since 2015 · 17 posts · 6 votes
    10y

    Corey-  Attleboro is a great place with its close proximity to Providence and 2 train stations  for the Boston commuters. Prices are very competitive 

    Happy to have lived and worked here for many years!!  

    0Reply
  • Elizabeth NewcombePro Member
    Investor · Keene, NH · Member since 2016 · 22 posts · 7 votes
    10y

    I have lived in Dorchester, Attleboro, and the East Side of Providence. Attleboro has a new train station, and some new development near there, and has the commuter rail. It sucks as a town, but is great due to its proximity to other things, the highway etc. Appreciation has been strong there as well, schools aren't bad, it's pretty affordable and rents are decent. Based on my analysis of the markets as a realtor, I'm focusing my investing sights on Attleboro and the East Side of Prov. There's a proposal for a large market in Fox Point, which would boost what's already a pretty desirable area. You can't go wrong with the East Side in my opinion, but getting deals is the challenge.  Its super walkable, safe, architecturallly beautiful, there's great food, constant source of tenants due to the universities...I am not familiar enough with the other neighborhoods of Providence to take a gamble there yet, but am interested in studying Cranston. Would love to discuss more, as Boston vs Providence has been a question I'm mulling over too. I'm analyzing deals everywhere in the middle, too, but it is helpful to narrow the focus in terms of mailings and driving for dollars! 

    1Reply
  • Brandon Ingegneri
    Rental Property Investor · Providence, RI · Member since 2015 · 1k+ posts · 594 votes
    10y

    2 family deal in the east side 02906 zip of Providence. I'd contact @Bruno C. for more details. May be something that some of you are interested in. 

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