Property in Boston - a bad investment?
I've spent several months researching and looking at properties in Boston. I can't find a single property in the Back Bay, Beacon Hill or South End where the rental income covers the costs. Im looking at multiple unit buildings (4 - 6 units) with a cap at around $2 million.
Im assuming:
- 20% down
- 30 yr mortgage
- 6.0% interest
- tax at 2.69%
- insurance at 0.6%
- repairs at 0.5%
- vacancy at 8.33%
In my analysis, many properties' income covers around 50 - 70%. The best I have seen covers 92% (603 Mass Ave). The building requires serious repairs and is in a sketchy area.
| 137 Charles Street List Price: 2,150,000 Units: 4 (1 of which commercial) Known income: $7,500 Monthly Cost: $15,032 Coverage: 50% | 603 Mass Ave List Price: 1,650,000 Units: 5 (1 of which commercial) Known income: $8700 Monthly Cost: $9,444 Coverage: 92% |
What am I missing here? Does the Boston property market suck? Does someone give you $20,000 a year just for being a property owner that Im not aware of?