Why is real estate cheap in Connecticut in general?

Question

I might get a job offer soon in East Hartford, CT. However, i would be relocating from Massachusetts. I am gonna rent first then house hack later when my job is stable. However, looking through zillow, the rent for 1 bedroom apartment is in the $800-$1200 range, pretty much similar to MA. However, the purchase prices in and around Hartford and the surrounding towns is almost half what it is in MA for the same type and condition of property if not even less. Whats up with that? and whats up with the flooding of foreclosed properties in Hartford and its surrounding? Is there a real estate crisis over there that i'm not aware of?

Account Closed · Answer

Have you ever driven through Hartford?

Shirley R. · Answer

@Mahdi Termos I own and manage small multi family in Hartford. Just come hang out with me 1 day and you'll understand. It's very tedious time consuming, energy soul sucking kind of land lording. Partly because the tenant pool is low income and needy and party because the properties are old and in need of constant repairs. I have not made a dime in profits in 18 months, but I'm happy at least the mortgage and taxes are being paid down.

It is a good place to learn the hard way everything you need to know about managing rentals. Sometimes I get pictures or gratitude from a couple of tenants I helped get out of the homeless shelter and that too keeps me going...

Ryan Allison · Answer

Account Closed there's a flurry of reasons why Hartford & East Hartford have cheaper properties.  In my opinion, a lot of it has to do with the real estate taxes there.  They are astronomical, particularly in Hartford.  It's definitely possible to invest in Hartford but with the property taxes and the amount of vacancies it makes it makes it an uphill climb for people like myself to venture there.

If you're looking to rent near East Hartford, Hartford does have a couple of new developments that from what I've heard appear to be close to full occupancy.  Glastonbury also has a flurry of new developments that are very popular but they're more expensive.

If you're going to be working in East Hartford, I would recommend Manchester or Vernon as a potential house hack.  You also might be able to get a 203K rehab on a single family in Glastonbury that might be a good option as well.  I do not own anything in any of those towns but I have heard from other investors who have done well with that strategy.

Good luck.

Harrison Elenowitz · Answer

@Mahdi Termos

@Mike M. Is right. Take a drive through Hartford and East Hartford before you seriously start looking for rental properties. You may find yourself with a place in Windsor or Manchester as a “safer” option.

Hartford and East Hartford sit on the CT and seems to be where water levels rise to some significant heights, completely washing out parks and such that are just off it. I’m sure there are a few diamonds in the rough, happy mining!

Also, more so in Hartford, the city has been working with quite a few developers to bring forth new apartments and updates for existing buildings to attract a more young professional pool of residents. So that may put the value of lesser quality apartments to have be super cheap to compete.

All of this comes from living around Hartford and half paying attention to all of the politics, so there could be more reasons/factors.

Jaysen Medhurst · Answer

Account Closed, Glastonbury is a great town to live in, but not so much for investments. Very few MFR and they're in demand, so the price-to-rent ratio is out of whack. Look next door to Manchester for investment properties. Many more options, strong rental market, lower prices. I grew up there, so feel free to reach out if you have any questions.

Welcome to Connecticut! It's a great place to live.

Filipe Pereira · Answer

Geez Louise! Lot's of information being shared here by "out of towners". Wow.

I own rental property in East Hartford, and manage properties there for other investors. We also have properties under management in Windsor, Hartford, Manchester, New Britain and Glastonbury. Basically all of the towns mentioned in this post. Personally, I think there's a stark difference between East Hartford and Hartford. For one, property taxes. I pay about $5,500 for a 8 bed, 4 bath town house style 4 plex with a nice yard and ample parking - built in 1942. I think you would be hard fought to find that tax rate in Hartford, Manchester or Windsor - if you did, the asset would most likely be at least 40 years older.I think the real mis-analysis (if you will) here is saying that 1 bed units go from 800-1200. Where? Maybe a cushy renovated mill or the likes in Glastonbury - but anyone paying 1200 for a typical apartment in a small MFR in Hartford county is way overpaying.

Don't be discouraged by anyone, and always do your own due diligence. There are good tenants everywhere. 100% of our tenants are spread between Hartford county and Springfield MA. Not a single one of them paid their rent late this month...

Michael Doherty · Answer

Account Closed I would try to avoid investing in Hartford/East Hartford for many of the reasons others have mentioned. I work in downtown Hartford and can attest to the developers trying to attract more millennial's in their apartment buildings. I have been watching one develop over the last several years. It is truly a ghost town post 5pm currently.

With that said, I still like Central Ct as a whole for rentals, specifically cash flow. I would expand your horizon to neighboring towns like New Britain, Manchester and Middletown. Aside from cash flow, I believe these towns will appreciate much quicker than East Hartford and Hartford.

I currently own and manage 12 units in New Britain and Middletown. My plan is to keep buying in these towns and avoid Hartford all together (generally speaking).

You wont find the same cash flowing properties in Glastonbury relative to the other towns. With that said, if stable tenants who will help contribute to your PITI is what you want... then it may not be a bad choice.

Let me know if you have any questions!

Account Closed · Answer

Thanks for the honest insight @Michael Doherty. For me it’s cash flow over everything so I’m gonna stock to the towns you mentioned and look around.

William Collins · Answer

@Mahdi Termos first off ditto on a lot of the comments you saw here.   What I would like to add is reasonable commute radius and tenant base.  Hartford has a decent job base, but is a food desert.  People do not live there if they have jobs above the median.  One key you should know is that the Connecticut river is the source of what traffic (we have none compared to Boston).  So if your job is East Hartford- stay on that side of the river for your housing and investing. Manchester is a solid town, able to invest in for reasonable prices. Glastonbury is higher end than Manchester, Vernon is slightly lower income average.  I have 4 duplexes in Manchester, a tri and 2 duplexes in New Britain, a tri and a duplex in Berlin (read Glastonbury like), and a duplex and 10 units coming online in Bristol.  Please note 0 are in Hartford.  If I had to rank my order I would do Berlin, Bristol and Manchester, with New Britain last.  East Hartford I would rank as similar to New Britain.

Edward Liu · Answer

You can find good investment properties in Hartford with good tenants, just need to search hard, avoid certain areas, have good property management.   My suggestion is look at New Britain or Middletown for investment properties - I have some that cash flow extremely well with no tenant problems at all.  Price is not that much higher vs. Hartford.

Why is real estate cheap in Connecticut in general?

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