Multi-Family Rentals Abound in Providence, RI
• • ☕️ 4 min read • By Noah Blumberg •Providence, Rhode Island is the city we're looking at today and it's an interesting one. Despite big price increases over the past year, it hasn't kept pace with many other cities in the U.S., including closeby Worcester, MA. So there's room to grow with prices remaining relatively low, but at the same time the rental market is very competitive. Of the 100 top real estate markets, Providence is 77th in a ranking of overpriced to underpriced. And it's considered the 6th hottest rental market in the country.
An Overview of the Providence Real Estate Market
Realtor.com has a sunny outlook for prices in 2022 and for most of the country. They predict another 9.5% increase in real estate property prices. Aside from local interest in properties, out-of-state buyers who consider the area a getaway have been purchasing in Providence.
One concern about investing in Providence is the price-to-rent ratio. The typical annual rent in Providence is about 29% of home prices which is fairly high. This could indicate that a correction is imminent. However, despite this dynamic 97.4% of rentals are occupied and vacancy days are only 27 days on average. As an investor looking to make money from a property investment in the near future, you'll want to be careful about which property you choose.
The Properties
Cash-on-cash return will be part of our next list, but as you can see, we've added cap rate. Cap rate doesn't always correlate with score because our scores are for homebuyers, not just investors. However, they frequently overlap because, generally speaking, the more you get for your money (this is what our score measures), the more return you can get on the same property as an investment.
A good example of this is property #2. The estimated cap rate is very high and so is the score. There are 10 bedrooms and over 4700 square feet of living space, so there's lots of potential. Of course you'll need to know what you're getting into as the property is sold as-is and is currently occupied.
You may also notice that multi family properties abound at the top of our list. Another such property, in one of the most desirable zip codes, is property #6. It's a 3-unit building with some recent updates and some potential earning power with an estimated 12% cap rate.
Reading Resources
- Forbes: The Best Markets For Real Estate Investment In 2022
- RentCafe: Top 50 Most Competitive Rental Markets in 2021
- Fortune: The best places to make real estate investments in 2022
- Realtor.com: 2022 Housing Market Forecast and Predictions
- Florida Atlantic University's School of Business: The top 100 markets based on their degree of overpricing/underpricing
- Zumper: Providence, RI Rent Prices
| Median List Price | Median Sqft | Median Lot Size(SqFt) | Median HOA Fee |
|---|---|---|---|
| $339,000 | 2,000 | 3,485 | $306 |
| Score** | Property | ZipX** | Type | Cap Rate*** | SqFt | Lot Size(sqft) | Price |
|---|---|---|---|---|---|---|---|
| 46.57 | 14 Florence St | 1.10 | multi family | N/A | 4850 | 2,178 | $270,000 |
| 46.18 | 132 Wendell St | 1.10 | multi family | 13.59 | 4768 | 4,016 | $399,900 |
| 39.97 | 29 Matson Ave Unit 18 | 1.10 | condo | 8.5 | 1224 | 1,224 | $130,000 |
| 36.87 | 150 Penn St | 1.10 | multi family | 3.1 | 5039 | 3,920 | $499,000 |
| 36.80 | 29 Matson Ave Unit 403 | 1.10 | condo | 8.28 | 1224 | N/A | $135,000 |
| 34.66 | 16 Greeley St | 1.14 | multi family | 12.63 | 4028 | 3,484 | $365,000 |
| 33.15 | 901 Douglas Ave | 1.12 | multi family | N/A | 8011 | 10,454 | $649,000 |
| 32.11 | 46 Priscilla Ave | 1.10 | multi family | 12.09 | 4671 | 2,428 | $375,000 |
| 30.95 | 152 Chatham St | 1.14 | single family | 8.73 | 4832 | 4,791 | $379,000 |
| 30.84 | 148 Laban St | 1.10 | multi family | 2.74 | 4446 | 5,000 | $320,000 |
| 30.74 | 25 Chatham St | 1.14 | multi family | 7.21 | 4832 | 4,791 | $459,000 |
| 30.54 | 305 Pocasset Ave | 1.10 | multi family | 1.47 | 6207 | 6,200 | $550,000 |
| 28.98 | 228 Lowell Ave | 1.10 | single family | 10.79 | 2176 | 7,840 | $155,000 |
| 28.00 | 39 41 Pinehurst Ave | 1.12 | multi family | N/A | 4856 | 4,356 | $450,000 |
| 27.61 | 56 Felix St | 1.12 | multi family | N/A | 4339 | 3,920 | $449,000 |
| 26.06 | 311 Plainfield St | 1.10 | multi family | N/A | 3563 | 2,178 | $379,900 |
| 25.30 | 32 Edward St | 1.14 | multi family | 5.8 | 3210 | 6,500 | $299,900 |
| 24.91 | 25 Hall St | 1.14 | multi family | 9.01 | 3604 | 7,840 | $499,000 |
| 23.46 | 104 Gesler St | 1.10 | multi family | N/A | 4312 | 4,000 | $549,900 |
| 23.19 | 20 Madison St | 1.11 | multi family | 6.26 | 2680 | N/A | $290,000 |
| 23.06 | 22 Rosedale St | 1.10 | single family | 8.98 | 2454 | 2,178 | $275,000 |
| 22.99 | 184 Hamilton St | 1.11 | multi family | 5.7 | 4333 | 4,500 | $503,000 |
| 22.64 | 10 Burleigh St Apt 11 | 1.14 | condo | N/A | 1036 | N/A | $165,000 |
| 22.33 | 15 Colfax St | 1.15 | multi family | 1.55 | 2931 | 3,049 | $420,000 |
| 22.32 | 52 Berkshire St | 1.12 | multi family | 6.07 | 3240 | 4,650 | $399,000 |