Eric Shabshelowitz Helped his Client Buy this Great Investment Property.
What area of Boston is best to invest in? That is a question we get asked a lot. We are still compiling and analyzing data for our annual investment property report, which provides a comprehensive multi-family analysis. If you would like to receive that report once it is available, please email Eric Shabshelowitz, our VP of Commercial RE. In the meantime, here are some initial observations:
Multi-family prices in Boston have gone up substantially in the past 4 years. In the chart below, the low in April 2012 was $131 and the high in September 2015 was $259. Put another way, the average sale price per square foot in Boston has essentially DOUBLED in the past 48 months.
Boston Multi-Family Sale Price per Square Foot (over last 4 years)
The inventory chart below is also interesting. It shows that total multi-family inventory in Boston has not drastically changed in the past 4 years. While some areas (such as the Back Bay and the Fenway) have seen very few purchase opportunities, inventory in other neighborhoods has clearly risen. This will be discussed in our annual investment property report.
Boston Multi-Family Inventory (over last 4 years)
Contact Eric Shabshelowitz, our Vice President of Commercial Real Estate, if you have questions about Boston's multi-family market.
West Roxbury is turning into one of Boston's most active neighborhoods. Our Vice President of Commercial Real Estate, Eric Shabshelowitz, has personally been active there and was the #1 agent for multi-families in 2015 based on MLS.
Here's a quick snapshot showing why West Roxbury is so popular:
Multi-family prices have trended upwards over the past 5 years (above chart shows price per square foot since January 2011). The average sale price per SF in 2011 was $162. In 2015, West Roxbury multi-family sales were at $239/SF (a 47.5% increase from 2011).
One of the drivers behind this increase is rent rates. The chart below shows average rents over the past 5 years. While not a drastic increase, the rents are progressing upwards. With rents in downtown Boston continuing to rise, this trend in West Roxbury should continue. The Days on Market chart, which is also below, shows that demand for West Roxbury apartments is growing (dropping from 95 DOM in 2011 to under 60 DOM now).
If you have questions about West Roxbury, or investing in any other emerging Boston neighborhood, contact Eric Shabshelowitz.
Cabot and Company finds Café Quattro a new space
Vice President and lead Commercial Real Estate broker, Eric Shabshelowitz, recently helped find a new space for the beloved Café Quattro in the South End! Previously located on Somerset Street downtown, Café Quattro thought the South End would be a great landing spot for the new location.
Now situated at 817 Harrsion Avenue near Boston Medical Center, Café Quattro has become a staple for many of the city's medical professionals and South End residents. The Italian-based restaurant boasts a full menu of classics and new takes, garnering the attention of Zagat.
"The menu spotlights hand-tossed thing-crust pizzas, including its signature quattro formaggi and unique variations like pear and parmigiana, plus housemade pastas, panini, salads, soups, and a full espresso menu for a caffeine fix on the go. The menu spotlights hand-tossed thin-crust pizzas, including its signature quattro formaggi and unique variations like pear and parmigiana, plus housemade pastas, panini, salads, soups and a full espresso menu for a caffeine fix on the go." - Zagat
Cabot would give Café Quattro two thumbs up, but we have a slice of the quattro formaggi in our other hand!
Stop into Café Quattro and tell owner, Evan, that Cabot sent you!
1. Set a Budget
Setting a budget and managing expenses is very important when trying to make a profit off of an income property. Budget for future capital improvements - heating systems, hot water tanks, the roof and other big ticket items.
2. Raise the Rents
Raising rents can have a huge impact on your property's value. A higher rent roll means increased annual income, which boosts the value of the property. As leases expire, ask a professional to price the units.
3. Give the Property a Makeover
Whether fully renovating the kitchens and bathrooms or simply adding a fresh coat of paint, sprucing up your property will help increase demand from tenants. Higher demand means higher rents
4. Change the Property's Use
The way a property is currently used may not be the most valuable use for the property. As an example, in the Boston area, the residential market is incredibly strong. Converting a commercial/industrial building may allow you to substantially increase the property's rent roll. Check what local zoning allows.
5. Upgrade Fixtures and Appliances
Replacing old light fixtures and swapping old appliances with modern ones can be great selling points. Adding washers and dryers to the building are also a plus and can be an additional source of revenue if they are coin-operated.
6. Lower your Taxes
If your property includes retail or office space, your commercial tenants should be paying their fair share of real estate taxes. Additionally, and while it is uncommon right now in the Boston market, if you buy a property for less than the tax assessed value, file for a tax abatement.
7. Separate Utilities
Depending on the system, a building's heating expenses can be one of the largest expenses for a landlord. If they are not already, consider ways to separate out utilities so that tenants pay those costs directly.
8. Renegotiate the Leases
Renegotiating a lease gives the landlord the opportunity to raise rents and pass through expenses, but also to encourage improvements to the property. In commercial leases, for instance, the landlord may give free rent and construction allowances so that the tenant can make improvements to the space, including redoing the façade of the building, updating signage, replacing carpet and repainting. The tenant should pay a higher rent in return for those concessions, and your property will be improved - it is a win-win.
9. Hire a Professional Property Manager
A professional property manager can provide a number of valuable services to landlords, including handling maintenance issues and emergencies promptly, responding to tenant issues, negotiating better pricing from vendors and contractors and paying bills in a timely manner.
10. Divide the Building
In very general terms, the smaller the unit, the higher the rent on a dollar per square foot basis. Reconfiguring the property to increase the number of units can translate into a higher rent roll. Check local zoning.
For a free consultation on how to increase the value of your investment property, firstname.lastname@example.org.
4833 Washington Street, W. Roxbury
Cabot's Eric Shabshelowitz has listed a fantastic investment building in West Roxbury. The brick building on Washington Street consists of four two-bedroom units, each with its own parking space and balcony. Annual operating costs are minimal as tenants are responsible for own utilities, and the draw is certainly palpable for commuters as the building lies on an MBTA bus route and is near the commuter rail.
OPEN HOUSE - SATURDAY 3/14 & SUNDAY 3/15 - 12-1:30
Sure, offices and schools have had a number of snow days. But how has the weather impacted the real estate market?
As you might expect, inventory is down... way down. The charts below are for residential condos, but we have seen a similar trend through all property categories.
Downtown Boston Condo Inventory (Past 3 Years)
Downtown Boston Condo Inventory (Past 18 Months)
Boston's Spring market generally starts to pick up by late January/early February. Due to the storms, inventory is much lower than normal.
Cambridge Condo Inventory (Past 3 Years)
Cambridge's inventory chart shows a similar trend.
Most would-be sellers are waiting for a break in the weather. In a few weeks, once the temperatures start to rise and the snow banks clear, we'll likely see a good stream of properties come on the market. If you're planning to buy this Spring, now is a good time to get geared up and ready for hunting.