All Forum Posts by: Katie Magoun

Maine investor here with a long history with and property ownership on MDI. My simple advice is to buy it if it has real value to you and your family regardless of potential rental income. Because I'll tell you, that will fluctuate.... for sure. At the end of the day, Bar Harbor/Acadia is considered an exotic destination because of it's not the easiest place to get to for most people. When people can't afford luxuries like trips to "exotic" locations, they don't take those trips. Past performance is not a guarantee of future success. And the housing crisis on the island is a real concern for the people who live and work there. So I think limiting STRs is going to happen eventually, whether this is the moment or not. 

If the rental income/investment is the primary driver of the purchase, you might've been better served to consider another town on MDI or just off island, where the percentage of STRs isn't yet high enough to trigger these kinds of proposals. 

As for resale, you're buying property on a highly desirable island (they aren't making more property on MDI). So your property value may drop a little in the short/medium term, but I doubt you'd ever feel totally upside down. You're also buying in a high market, so if you're feeling unsure, like you may want/need to sell in a year or two, I'd pause to reconsider. If you can plan to hold onto it -- even if the economy dips and values go down/rental income drops -- than I don't think you'll regret it as a long term investment. 

Best of luck and welcome to one of the most special places on the planet. :) 

As always, it's a numbers game. If the numbers (and we always use conservative numbers in our analysis) work, then it's worth pursuing. If you're really concerned about a downturn, run the numbers again assuming a downturn. Are you still above water? If yes, then you can feel confident moving forward on the deal. As others have said, there may be shocks or adjustments to the market over the next few years, but over the long term, prices tend to rise. Yes, you should be prepared for those bumps and dips, but know that buy and hold investing is just that. Over the long term, you will see gains. 

Also keep in mind that recession impacts investment classes differently. For example, if you're investing in luxury rentals in a resort area then you might be more exposed to market corrections as the percentage of people who can afford your rentals shrinks. Conversely, if you're focused on working class (C/D level) modest rentals, then you might actually see a bump up in demand for your units as more people at the top of the rental market are forced to cut back on housing expenses and/or lose their homes. 

Overall, I think it's great that you're thinking about it carefully. Too many people dive in without as much thought and it never hurts to be more prepared rather than less. 

Check with your insurance first. Ours doesn’t cover M2M rental agreements. 

Everyone has already made the important points, but I'll just add my personal opinion as a fellow Maine investor. 

Best/most economical option is propane Rinnais, but it sounds like it might not be a viable option without the adequate outdoor space for the propane tanks. I was a Rinnai skeptic once, but having opted for that on a few conversions in the past few years, I'm on board now. 

Second best option is to use the existing oil burner (can it handle the extra demand?) to heat the units currently with electric heat and as others have suggested, weatherize, weatherize, weatherize. And install the right thermostats. We learned the hard way with a building with existing/inherited older thermostats - tenants WILL set the heat to 90 if allowed to do so.

Finally, at least consider the possibility of energy efficient options. Heat pumps are gaining traction in Maine, and could ease the demand on your existing oil burner (if that's a concern). 

Good luck, and congrats on the new building! 

And re: parking. We went to labeling the parking spots individually and adding a "violators will be towed..." sign to the parking area. It only took one call to the tow truck to get the whole group in line. 

I agree with @Ed Emmons. Maine is a a very tenant friendly state, and it is almost impossible to evict on the kind of basis that you describe (such is considered a "no cause eviction" and can be challenged, often with success). 

Do you have language in your lease about not causing undue disturbance to neighbors? We include just such language in our leases for this purpose. We did have a tenant with issues in a 4-unit (loud, disruptive, parking issues, etc.). Police were summoned on multiple occasions, but ultimately we weren't able to evict on that basis... she also happened to be  behind on her rent and that was just cause for eviction. Not the poor behavior. So like I said earlier, Maine is exceptionally tenant friendly. Not sure you'll be able to evict based on poor behavior.

I would work to get them all on new leases. You can raise rent and they can either 1. voluntarily opt to move on, or 2. pay more and give you lease terms that better protect your interests moving forward. Option 2 would be to offer to buy them out of the property. Even if only 1 of the problematic tenants accepts your offer, you'll ultimately be better off. It's a bummer that this is what's necessary to resolve these kinds of situations, but sometimes it's far less costly in the long run. 

Good luck. Sometimes people just can't act like adults and it's so disappointing. 

Mid-coast Maine is beautiful. The towns of Camden/Rockport and Rockland in particular are both highly desirable and are considered expensive markets for Maine. The downside (for many) is that they're not particularly close to amenities (major airport(s), shopping centers, etc.) or larger/stable employment opportunities. And the surrounding suburbs drop off pretty steeply in desirability from a real estate stand point. 

Brunswick and Bath are further south, and in my opinion, are more promising rental markets for long term buy and hold than traditionally mid-coast towns like Camden and Rockland (though I love them both!). Bath is home to one of the Navy's largest and busiest shipbuilders, BIW... and while that business can be volatile at times, the US isn't going to stop spending money on defense any time soon. Brunswick is a college town (Bowdoin) with LLBean Manufacturing and close close proximity to Portland. We considered Brunswick and Bath and spoke with a few agents and property managers up that way... the consensus is that demand is outstripping supply, so the market is investment friendly. 

Any towns along the coast will have higher taxes, but they are also usually the most desirable places to rent. 

Of course the prices will look low to you as someone coming from California. I'd get to know the market that most interests you and figure out what makes sense numbers wise. 

Good luck, and welcome to Maine! 

Welcome to the Southern Maine area! I'm not sure you could think of two places more different than Maine and California... ha. 

We do have commutes but we don't have traffic, so it's what I call "driving commute." For example, plenty of Maine people work in larger towns and cities, but live in rural communities within about 45 mins - 1 hour drive. The southern Maine region has a significant population of folks who work in Boston and commute in to the city daily or occasionally. But to use your example, if I live in Westbrook, I'm in downtown Portland in about 10-15 minutes max. 

The market in the Portland area is hot for Maine, but I know it'll probably look inexpensive to someone acclimated to the California market. That said, I would advise you to find a good real estate agent/office with good knowledge of the multifamily market to help you find something that works for you. There is a great deal of competition, particularly in the niche you're considering -- owner occupy. If you can spend the time before you actually move really developing a set of criteria, you'll be ready to jump on the ideal property when it comes up. 

We just added 2 buildings in Westbrook to our portfolio this year, and I've been really pleased by how well they're operating even in year 1. The market for rentals there is strong, and there is still some opportunity to add value if you know what you're doing. 

Best of luck to you! 

PS - Yes, we have snow. You'll want to budget for something called "snow tires." ;)

I agree with others, we need more info. Is it currently rented? 

In my understanding, Biddeford is a patchy rental market. It has historically been a blue collar (bordering on rough) mill town. I know that it's recently seen some revitalization, but the housing stock is still pretty worn out in many neighborhoods. All of this is to say that your price sounds reasonable for a maintained 3-unit in a decent neighborhood, but could be high for many buildings in Biddeford. 

@Harrison Smith is the expert on the Biddeford market. He'd be a great resource! Hope that helps. 

I grew up in Maine and aside from about 10 years for college/early career, I've lived here my entire life. I can't speak to the professional real estate side of your questioning but re: the "from away" bias... 

1. Get involved locally. Show folks that you're committed to the welfare of the community and they'll start to view you as one of them. We are a practical people and we want to see that you're adding something to our state, not taking anything away.
2. When asked, always emphasize that you choose Maine (even if that's an embellishment of the truth), and you're proud to be a local. Not everyone can live in Maine, and we consider ourselves fortunate to be among the few. 
3. Don't advertise that you're from away. Get a local cell number (you'd be surprised what a big deal this is to some people!). "I've lived in New England for most of my life, and happy to end up in Maine... " Lean on your wife's native Maine cred. 
4. Get to know the state. It should go without saying that you get to know the local community that you choose, but also make an effort to know the state more broadly. Nothing irks natives more than a out of stater that doesn't know how to pronounce Bangor correctly (Bang - OR). 

I know some of this probably sounds ridiculous. But you're absolutely right that Maine people can be resistant to folks from away. When it comes down to it, I think we feel like we've earned our peaceful, beautiful state, and we're looking for those who come here to earn it, too. And we're wary of those who want to overbuild and overpopulate; particularly when those coming in do little to contribute to our tight knit communities. 

Best of luck! That's a lovely part of the state.