East Boston / Chelsea

[Mark D.]

I currently have a couple buy and hold rental properties in the North Shore of Boston. However I'm thinking it might be a good time to buy and hold in East Boston (eagle hill) or even Chelsea. 

The thing is that I've never bought a property that needs a lot of work. For example roofs, heating, kitchen etc. In this are of the city given the age of most of these homes. What should I be budgeting per unit. I would like to find a 3 family. I'm self employed so I can watch over the project b/c I have the time and flexibility in my schedule.

Has anyone invested in Chelsea? Is there a demand there for rentals? 

Any help would be greatly appreciated! 

[Russell Brazil]

High demand for rentals in both Chelsea and Eastie. I just sold off my last real estate holding in Chelsea. One thing to be aware of is the housing stock in both these locations is very old and has a rougher tenant base. So you will have a lot of repairs and capex going into the properties. 100+ year old housing just always has something that is a problem coming up.

[Cam Roberts]

I live in Chelsea and I love it. Prices have been going up steadily for a few years; however, I anticipate it will continue for quite a while as every other city surrounding Boston already costs significantly more. Chelsea is changing. If you do buy- yes budget a lot for repairs- but do buy here. I see big potential.

A lot of buildings here have nice bones. You can find beautiful brickstone/row-house buildings built in the 1800s. Chelsea has some very good and some quite bad areas- study it. The waterfront is intriguing- and more expensive.

The city is going to increase taxes on 3 family owners I heard in the city paper recently.. that is worth looking into.

Facts about Chelsea:
They are about to build another luxury apartment complex in Chelsea with around 700 units.

FBI building is complete.

Silver line completion is nearing. 

[David Barnett]

@Cam Roberts Fantastic advice.  I was curious as a resident, what have you been seeing in Chelsea?  From afar, I've been seeing a lot of multi's being converted into luxury condos, as people are being priced out of Boston, Cambridge, Somerville, Medford, etc.  I'm assuming the nicer areas of Chelsea are being converted from multi's into condos?  

[Cam Roberts]

@David Barnett Thank you. 

1. Restaurants:I moved to Chelsea 2 years ago. 2 years ago there weren't enough restaurants I wanted to go with friends. In the last 2 years, Chelsea Station, and Ciao pizza have opened- 2 of the best restaurants in town. Fusion foods is relocating to a nice new location near the silver line stop/market basket. Mystic brewery is also nice to have- breweries often get into up and coming areas early.

2. Increasing owner occupancy tax reimbursement: Previously 20% reimbursement for owner occupy- now its raising to 25%- very nice benefit.

3. All of the brickstone multis in the waterfront/south end district to admirals hill get snatched up fast- multiple offers- often cash: People are catching on- but the prices are still in the neighborhood of 200-250$ a square foot. I've seen people successfully turn these multis into condos. The condo inventory in Chelsea has pretty high turnover in the hot areas. Spencer lofts have seen tremendous increase in value over the last few years. Non brick buildings are also moving fast. Eastie prices are already 400-450$ per square foot. I like many parts of Chelsea a lot more than Eastie. 

4.Rent: In the last 2 years, rent for a 1 bedroom has gone up significantly. I think I could rent my place for 25-30% more than I could have 2 years ago. 

5. Chelsea is embracing change- artists are painting murals- designers are moving in. The city is approving a lot of development projects. 

6. The commercial district around market basket seems to be most attractive to all the large apartment complexes and corporations. All the new apartments buildings are being built close to the silver line stop. Hotels are being built or existing ones like the Wyndham are being upgraded- possibly to provide an alternative to future Wynn Boston Harbor casino patrons.

7. Broadway and the area near city hall have a lot of potential- but a long way to go. I want to see people start investing here.. there are more hurdles with these areas- just more potential for crime. People have talked about moving the methadone clinic to a more secluded location- its a controversial topic. Broadway could become a really cute downtown someday- the buildings there have a lot of character. There is a great theater- and the city hall building is beautiful. 

8. The waterfront from admirals hill to meridian street is gentrifying fastest. 

9. Look at flood maps- some parts of Chelsea are at flood surge risk- however, so is pretty much all of seaport and back bay to put it in perspective. 

[Mike Hurney]

@Mark D. Welcome.

"The thing is that I've never bought a property that needs a lot of work. For example roofs, heating, kitchen etc. In this are of the city given the age of most of these homes. What should I be budgeting per unit"

We usually match Contractors up with Landlords and Investors but you may want to look at our latest blog post at MassRealEstate dot net

[Andrew Zimmermann]

Mark Davidson I live in Eastie - Eagle Hill in particular. The housing stock is generally old and in various states of disrepair. You will encounter problems that don't show on an inspection. It's not a big deal but I would bump your contingency from what you are used to - more for for sale a little less for rental.
Also eagle hill varies quite a bit. The part of the hill facing Chelsea is much rougher than the part closer to the blue line. Drive/ walk the area. Street to street can make a big difference.

[Jarrett Lau]

@mark dav

@Mark D. I lived in E.Boston for 10+ years(and own there). I'm an investor, owner,general contractor and manage 500+ properties in greater Boston. PM me if you want to chat as I'm sure I can provide some input/benefit to you as all we do is buy/rehab and manage

[Patrick Wheeler]

As mentioned, it will be tough to find solid buy and hold deals in East Boston, especially Eagle Hill. Developers have already taken advantage of most of the opportunities there. However, there should still be some opportunity to get into Chelsea before it's too late.

Where are your current properties located exactly? Why not continue to buy in those areas instead of considering shifting focus closer to the city?