Weekly chit-chat about new listings, sales or other insider info on the Martha’s Vineyard real estate market, by Fred Roven, Martha’s Vineyard Buyer Agents.
That Martha’s Vineyard has a serious lack of housing for residents is no secret. Many reasons exist and the most striking is the low average family income and the high average sale prices. The Dukes County Regional Housing Authority administers the rental assistance program and is a group on the Island making great strides by making homes and rental properties available to Island residents through a variety of means. Another local organization, the Island Housing Trust reports the median price of a home on Martha’s Vineyard is $670,000, 85% above the statewide average; 38% of year-round households have income 27% below the statewide average; 50% of year-round households spend more than 50% of their gross income on housing.
Even if a resident finds a mortgage they can obtain and a home they can afford by stretching, they still need to come up with a deposit. There are local, state (Mass Housing Partnership) and federal programs (Housing and Urban Development) that can help financing, but a buyer still needs to be able to save for a deposit. The limited number of rental properties or apartments on the Island, coupled with higher than average rent when available makes saving for that deposit near impossible. Median rent on Martha’s Vineyard is 30% higher than the statewide median and 33% of all houses are short term summer rentals. When summer comes, many residents move out of homes they rent over the winter at low rates. Even homeowners move out and rent for the summer to make Island living affordable. The “Island shuffle” come summer is a discussion all of its own.
With high prices and limited affordability on Martha’s Vineyard, the possibility still exists for buying homes as an investment, rent out year round and make a profit. Probably silly to mention, and the goal is a profit not an expense come year-end. Before beginning the search process, there are a few items to consider:
- Condition of the house
- Property taxes
- Insurance costs
- Unexpected costs
- Buy below market
This item can be challenging on Martha’s Vineyard but not impossible. There are homes that have been on the market for a long period of time, need cosmetic work and are out of what would be considered prime summer rental areas.
- The 1% Rule
In order for your investment to work, this last consideration is going to have to at least take a back seat to other considerations. You will need to take into consideration appreciation on value, consider using your property as a vacation home or primary residence down the road, or be willing to live with a less than ideal return on investment. These effects can be made more palatable with funds available in most towns, and particularly by the Dukes County Regional Housing Authority. They have funds available to assist residents in securing rentals, providing additional security to owners and even give subsidies to tenants and possibly investors in exchange for renting to low and moderate income households.
There are many available homes on the Vineyard that can be owned by for-profit individuals or groups while providing affordable rentals. Prices start at $479,000 and most of these will be two-unit properties with a main house and guest house providing more income opportunity. A current list can be found at Martha’s Vineyard Investment Opportunities.
A few properties stand out and fit many of the criteria above. First is at 4 Hye Lane in Edgartown and priced at $899,000. The property can have a total of six bedrooms and has a house, guest house and garage. Completely renovated in 2016-2017 with new exterior shingles, hardwood floors, granite countertops, top of the line appliances and central air-conditioning.
Another is at 120 The Boulevard in Edgartown priced at $895,000 and has a protected waterview. The property includes a 3 BR contemporary with a first floor bedroom and a 1 BR apartment over a 2 bay garage. Set on a large corner lot within easy walking distance to public boating and water access.
The two-family home, located at 277 Norton Avenue in Vineyard Haven and priced at $800,000, and is within easy walking distance to the Lake Tashmoo Boat Launch and the Community Tennis Courts. The house and apartment contain a total 4 BR and 3 baths in close to 2800 SF of living space.
For information on island programs available to tenants and owners alike to help create income producing affordable rentals go to Implementation Capacity and Resources.
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