Best Cap Rates in RI?

[Helene Vincent]

Does anyone have insight into which RI towns have the best cash flow for rentals? Looking to purchase some residential rental properties and trying to compare cap rates across RI. Thank you for any insight!

[Anthony Thompson]

@Helene Vincent if you're really looking for a market-wide survey, of cap rates in individual cities or towns, you'd likely have to either buy such research, or else get it from a very active broker (who has tens or hundreds of people working under her/him).

If you're interested in buying it, you can usually get a very good idea of who sells it by finding free versions of such reports which are usually at the regional or (at best) state level of granularity. It's when you want more specific, finer-grained data, that they're happy to sell it to you.

Individual investors as you're likely to find here on BP, can tell you their personal experiences buying a few properties in certain cities or town, but you're not likely to get a comprehensive overview of all cities and towns in the state, if that's what you're looking for.

At the mid level, which you sometimes find here, are active agents who probably have a sense of trends in certain cities and towns, and will be happy to talk to you about their thoughts on that, but who still probably don't have access to enough transaction data to give you an idea of cap rates in every city/town (unless they pay for such reports and are happy to share the information with you as their client, of course :)

If you're really asking, "where can I get the most bang for my buck?" in a looser sense, then my usual advice is, look at supply and demand. Prices are higher, and cap rates lower, in areas where more investors are looking - Pawtucket ("close to the T") and Providence, especially the East Side.

If you're willing to go further out from the main urban centers, then you'll have much less competition from investors coming down from Boston, and you'll generally get more for your money. People ask about Pawtucket and Providence (and to a lesser extent, Cranston, Warwick and Woonsocket) all the time. But far fewer people seem to look in Lincoln, Smithfield, Coventry, Scituate, etc.