Three families for sale in Dorchester vs. those available in Brockton. A client recently asked me about the three-family opportunities that were on the market in both Dorchester (and all of Boston for that matter) and in Brockton. I told him that there were pros and cons to each. The biggest one is the distance. He is a Boston guy and if he wanted to manage these properties himself, I told him, he would have to take travel into consideration.
There's also the numbers factor. The prices are generally lower in Brockton than in Dorchester, but the rents are lower as well. There are more jobs in Boston, better access to public transportation and schools. I decided to create a spreadsheet for him to crunch the numbers and decide for himself. The first version was an "as-is" look based solely on what MLS gave us. I did make adjustments for incorrect or missing real estate taxes. I did not take into consideration any work that needed to be done to get the home into rent-able condition, if needed. I took 15% off total rents for expenses (not including taxes, which I factored in first).
As you can see there are a couple in Brockton that crack 20% in ROI compared to the 5 in Boston. The second spreadsheet shows where I have plugged in estimated rents for homes that had vacancies (seen in blue).
As you can see, the potential is much greater after this exercise, with 24 three-families returning 20% or higher. Nine are from Brockton and the rest are from Boston. More analysis will need to be done in order to accurately predict which homes have the best potential, but this is a reasonable starting point. Let me know if you would like the full spreadsheet that shows the number of rooms, bedrooms and rents for each unit. I'm always happy to assist any investors out there who prefer like-minded real estate professionals working with them.