All Forum Posts by: James S.

It is my understanding, and take this with a huge grain of salt as I do not live nor have I invested in ManchVegas, that the area between Elm and Maple St.  is generally considered the "worst" part of the city; worst being relative in the safest state in the country. I've only formed this opinion based on conversations I've seen here, my own time visiting Manchester, and talking with friends who have lived/invested in the area. I don't have any statistics to back this up, so chalk this up as anecdotal evidence only. 

I'm sure lots of people here with more experience can chime in. Have you driven around the area? It isn't to hard to tell (usually) when you are in a C or D area just by driving around and looking at the buildings, road, and neighborhood.

Rick,

I've been looking for a tri or quad in the Dover area for some time now. I think there is money to be made in quads, and even tris, but I wouldn't dismiss a duplex wholesale. I notice you didn't mention your current living situation. I live in a duplex I bought, and while it cash flows because of the time I bought it, even at today's ridiculous prices it would still at the least cover my mortgage and I could live for mostly free in a great area in downtown Dover. I guess what I'm saying is I don't know if I would dismiss wholesale a 2 unit. If you can even get it to just cover the mortgage, that still puts you at a big advantage over most. 

Granted, you're right, that in the current market here in Dover and the surrounding areas you aren't going to cash flow in a duplex. But I just don't think there are that many quads in the area. And those that do come up would be so prohibitively expensive (like near Silver st, those could be 600k easy), that I'm not sure it'd even be the best use of your money. Again, depending on your current situation, it might make more sense just getting into something, anything, that can help you towards long term goals as opposed to waiting for a scenario that rarely exists in this area.

In any case, feel free to refute my points here, I like chatting about this area and the market here.

-James

I agree with @Steve Racicot. Be careful on the purchase side. I think this was said somewhere on BP, but you win or lose on the front end. That is, if you bought at the wrong price, there's nothing you can do that's going to turn a loser into a winner. Do your due diligence and be patient. 

I'd recommend the house hacking strategy mentioned above. You can cheat into a more expensive property (hopefully with a better class of tenant) that way.

 No problem man. It's funny you're looking up here for cheaper properties...NH doesn't feel cheap to me when I see all these people buying 20 units a year in the Midwest. Though the seacoast where I am is the most expensive part of the state on the whole I think. I imagine Boston is a fun place to invest in, albeit with higher stakes. 

 Neil, as Jennifer mentioned, definitely do some due diligence on Keene specifically. UNH had such a housing shortage they flooded into the town, much to Durham's chagrin, and they started making ordinances to keep out the only thing keeping that dinky town alive. If I'm making a general rule (and I don't know Keene specifically), it's to be as close to campus as possible. I also have some rentals in Tempe where I went to college at ASU, and proximity to campus (or in ASUs case the light rail/bus stops), make all the difference. This isn't as huge a deal at UNH, but may be in Keene, as once you are effectively off campus you need a car either way, so I don't notice a large drop a mile out or 10.  As Matt pointed out, Keene is not always the best area, and largely relies on the university to function effectively as a town.

I'd look as close as possible to the actual campus. There may be a lot of deferred maintenance in these places, but thankfully, as long as stuff isn't broken, college kids don't seem to care. That is, they don't need stainless steel stoves, updated fixtures etc. It just simply isn't in their list of wants (which is usually only two long 1) not live at home or 2) not be in the dorms). So I think you can still eke by with rougher properties. Again, those 19-year-olds-driving-2-year-old-beamers will care about that stuff, but they'll rent top of the line stuff that's been recently built anyway, probably out of your price point.

For what it's worth, I continually netted 20-30% more per unit from college students than I did with non-students, on the whole. That can be very property specific, but I think it's worth the effort. Make sure the property management company you use is very familiar with student rentals. If they aren't sending people to campus to put posters at the MUB and around town at the laundromat, they aren't doing their job correctly and are not going to get you the best results with students. 

College attendance isn't going down, and again, though I am not familiar with Keene's housing surplus, over time that has to work itself out, if for no other reason than no one can afford to live near UNH anymore. 

Hi Neil,

I have both rented to college students my properties, as well as managed a small property management company that focused heavily on the same practice. This is at UNH in Durham, but at least we're in the same state. 

I'll give a quick pro-con list from my own experiences and can elaborate as you'd like.

Pro

-Rents are typically way higher than renting to families or couples, the margins are especially large on SFR where you can rent to 5-7 kids, and frame it as a per person amount (since that's how they are paying).

-They almost always pay on time, as most of them are simply forwarding their parent's checks. They, and their parents, are more concerned with ruining their credit than a lifetime renter.

-They never squat. When the lease is up at the end of the school year, they leave. 

-They are easier to, intimidate isn't the right word, but it's easier to check their expectations since they have no previous experience with renting. This sounds bad, but I'm not sure how to frame this correctly at the moment.

Cons

-They beat the place up. 

-if you don't screen properly (and sometimes even if you do) you are going to have a lot of headaches on the noise front, especially in apartments

-Since they haven't rented before, sometimes they don't know really simple things, like it's their job to change a light bulb, or to stop half-turning off steam radiators. 

-Parents...the helicoptering is getting worse, so dealing with their warped views on their precious snowflakes can be a REAL hassle, far worse than the kids themselves.

Here's some more general tips I've gained over the years:

- If renting SFR, you need to rent them a year in advance...if they aren't rented by Christmas for the following year, you're going to have trouble filing them (especially now with the crazy rate of construction really close to campus).

-Don't rent to Sophomores. Just don't. People who are old enough to drink at a bar and older only. Grad students in rigorous programs are the best (they are never home). 

-Men beat up the place/have parties more, but on the whole I think are a bit easier. A lot fewer maintenance requests, parent problems etc. then with women. Of course, don't discriminate on sex, but just keep it in mind. College couples are the worst of all; probably 50% break up during the course of the lease.

-You'll get a lot of no-shows, and a lot of people who don't ask the right questions as a potential renter. Just tell them everything they could possibly want to know up front. Because they won't ask and then complain later. Go over it twice. 

-Check out their cars; not just the cleanliness (that goes for all tenants), but how old the cars are. If they are newer, their parents are paying and you should have no problem with rent. If the cars are too nice, those parents are helicopters, and will give you problems. 

-Get a co-signer. I've never needed it, but it's helped put pressure on kids in the past. It  works better with a dad because kids are more afraid of him (I don't want to have to call your dad...).

-Don't let them talk you into a 10 month lease, and in general, I don't let them sublet (if it's like one or two kids in a house of 6 I just tell them to figure it out, I don't care). Try to grab them on the front end (June-June) instead of (August-August). They will want to bolt when their year is done, so facilitate that. 

Anyway, that's a few quick things off the top of my head, feel free to hit me up with questions.

 Stephen,

Having grown up in and around the area, and knowing people who invest in the area, it's a bit of a tough market. Rochester has a reputation as one of the worst cities in the state, in terms of crime, poverty etc. Rents there are significantly depressed compared to Dover just beneath it. This is a very broad brush, but if you can afford to live in Dover instead of Rochester, you are going to. The reason you live in Rochester is because you can't afford Dover or Portsmouth. That's about it. 

This means that all the people getting pushed out of Portsmouth, then Dover, and now even Somersworth because of higher rents on meager incomes all move to Rochester. It's not an accident they have the largest mobile home population in the state. 

So, while prices are cheaper (and hardly 'cheap' anymore, as mentioned above) than the aforementioned communities, the amount of rent you can charge, and the likelihood that tenant will actually pay you, are much less.

That's not to say there aren't nicer areas of Rochester that could be OK to invest in. Just stay far away from anything near downtown. Anything near Pine St., Lafayette St, the Fairgrounds etc. I'd also advise against anywhere in Gonic, as well as "downtown" East Rochester, or the bottom half or Portland St or anything near Signal St. Variety. If anything, I'd shoot for Duplexes on the borders of town, Salmon Falls Road (some of it) closer to Dover, past the hospital on 108, some of the stuff near Route 11 isn't bad as well. But those are also less likely areas to have a lot of rentals, so it's a tradeoff. 

Thanks for the update! Appreciate the work you are doing.

@Anthony Cennami Any update on this? I would love to attend these meetings. 

@Nate Burnett, Congrats on snagging one. I believe I know the property you purchased, should be a good place. I agree that it's been tough to find deals in Dover that come anywhere close to satisfactory on the financial front, though I tend to weight that less heavily if you plan on living there for a while. 

I'm not sure what Thomas means on the tax front; sales price should not affect your unit specifically. I have been out of the municipal tax and assessing world for a few years now, but assessments are based on a roving 20% re-evaluation of the town, with a 5 year re-assessment process overall for the whole city. Therefore, your home will only increase in assessed value the same as any other in your neighborhood, save you allowing them in following work completion to get a specific assessment. But regardless of that, sales price should not impact your taxes at all, as that information isn't used in specific assessments, but rather when doing the overall value of a neighborhood for general reassessments of value in the city. Of course, I have never been contracted as an assessor for a town, and it's been some years since I worked with them in a municipality, but I believe my information to be generally correct.

For the sake of a data point, when I was a PM I had a few houses that I rented by the room; it works, but is less preferable than a group of college students that all know each other. College kids treat homes worse (not necessarily reckless or anything), but the highly increased rents more than makes up for the difference, money-wise. I will say, in Dover, renting large units to college students has gotten increasingly harder, given the absolutely massive boom to new construction in Durham. The last few years have been much, much, harder to rent to student groups in Dover than it was 5 years ago. Whether this trend continues, as rents get even higher in Durham, I am not so sure about. In fact, I find that local students (those from NH), have been pushed off campus by Mass kids and exchange students, and are looking to Dover for "affordable" housing.  That's just my two (amateur) cents.

Congrats either way!