[Erika]

We bought a 3-unit property in Boston a few years back, rented it out when we moved to Atlanta, and bought a new home.

Now we want to move back to Boston because of better job prospects.

Instead of living in one of the units, we’re considering buying another 3-unit property.

What do you think?

Granted we will have to rent that house in Atlanta as well.

[Sheila]

The price of homes in Boston are crazy high as you probably already know.

I’m sure the one you have has increased a lot since you purchased it.

[Tony]

How can we advise you without any financial context, personal short/long-term goals or interests, or cap rate numbers?

[Rick]

Atlanta is a weird market (it is also my market). Sooooo many demographic reasons that it has been a high octane city for jobs, house appreciation, etc etc etc for the last 3 decades.

But all of that said, the rental rates have not historically been great for landlords.

I often see $2,500 rent for $400-500k houses.

I think much of this is, for whatever reason, Atlanta people have latched on to holding their previous primary residence.

And we know mostly and definitely on average previous primary residences make for poor rentals.

I am not saying your house won’t have a great rental rate but make darn sure or I would sell it now, take your tax free cap gains allowance, and move on to a better long term asset.

[Casey]

I think it really depends on the neighborhood and cost of the building.

I live in East Boston and a triple decker that needs to be completely gutted will go for well over $1 million…

I think one on my block that was a gut job went for $1.6 million last year.

I think it might be kind of hard to make a profit on that because you’re going to sink a lot into renovations to be able to charge the rent you need to in order to turn a profit.

Plus getting permits to do anything in Boston takes forever.

[Jenny]

Does the math pencil out? Does it fit our lifestyle? SFH are hard to cashflow, would the rent cover all the costs and give you a decent return?

If not, is the future appreciation worth carrying the holding costs?

[Celia]

Price in Massachusetts are crazy. We moved last year to Colorado. We got a better home here and still had money left over from the sale of our home in Woburn.

Good luck on your home search I am sure you will find something.

[Dawn]

If the math works out and you have a decent amount in reserves, sure! Why not?

[Aparna]

Go for it if Boston rental market is looking good. The house prices have dropped in TX, hence a great time to buy.

Hhowever, it is harder to get tenants for SFH these days.

Three-plex should be easier to rent and with you house hacking, you need to rent only 2 units.

All the very best!

[Author]

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