Cambridge, MA‘s 3 unit multifamily houses, typically triple deckers, are expensive from the point of investing for cash flow. I’ll walk you through the numbers. All data in this post is based on information provided to and compiled by MLS Property Information Network, Inc. (MLSPIN) and extracted on November 30, 2010. All 2010 numbers are year-to-date.
The average price of a triple decker peaked at $870,400 in 2005. The average price has fallen 88% since then. That’s good news for investors. Sales of triple deckers are at 21 so far in 2010. That’s a recovery of 15 and 16 for the entire year in 2008 and 2009 respectively.
The average rent per unit for triple deckers have not changed much since 2005. So far in 2010, the average rent per unit is $1537 per month. Let’s see how this rental income works out for triple deckers in Cambridge.
In 2010, that works out to a rent multiplier of 13.9. For investors, that compares to a rent multiplier of about 7.2 for 3 unit multifamily houses in Everett. If you invest in Lynn, you are looking at a rent multiplier of closer to 5. Of course, there is a perception that investing in Cambridge is less risky. Is that reduced risk worth the high rent multiplier?
Contact Rich today if you need help figuring out answers to those questions.