Medford MA Average Property NOI

373

Based on the most recent MLS data, Medford real estate may be one of the best opportunities for property investors in the Boston area.  Both rental and sales demand have increased in Medford over the past 5 years as housing costs have soared all over the metro area.  Given its close proximity to Boston and easy access to Downtown, it has been one of the suburbs that thrived throughout the pandemic.

Now average rent prices for apartments in Medford are on the rise as are real estate prices, but it remains among the more affordable real estate markets in metro Boston.  In some cases, it’s even more expensive monthly to rent an apartment in Medford than it is to buy a home.   Medford’s median single family home price ($756K) and the median condo price ($620K) are still below Boston’s median ($784K and $698K respectively) , and have been rapidly increasing in recent years.

Projected Net Operating Income for Medford Investment Properties

It goes without saying that every property is different and there are good and bad investments in every neighborhood.  That being said, we can still get a general sense of a neighborhood’s investment viability based on current real estate prices and average rent prices.  To find the potential profitability of a neighborhood, we’re doing a standard NOI (net operating income) calculation.

Expected revenue is based on Medford’s average rent price.  Expenses are a sum of mortgage payments, homeowner’s insurance, property taxes, and 10% maintenance fees.  We’re calculating the mortgage payment based on a standard loan (30 years, 30% down, 3% APR) and the median sales price over the past 12 months in MLS.

Medford Real Estate NOI By Property Type

Based on property type, we can see that both condos and single family homes for sale in Medford yield a negative NOI on average.  Medford condos look like a slightly better option compared to single family homes, as the projected condo NOI of -$7,045 is a lighter loss than the single family NOI (-$9,504).

Medford Avg. Rent x 12 Estimated Annual Expenses NOI
Medford SF $25,656 -$35,160 -$9,504
Medford Condo $25,656 -$32,701 -$7,045

Medford Real Estate NOI By Property Size

Luckily, MLS gives us more data than just property type.  We can also pull median sales prices on different size properties, which can have a big impact on NOI calculations.  In fact, based on current median sales prices, purchasing a larger property size like a 4 or 5 bedroom could yield a healthy profit.

Medford Avg. Rent x 12 Estimated Annual Expenses NOI
Medford SF $25,656 -$35,160 -$9,504
Medford Condo $25,656 -$32,701 -$7,045
Medford 1BR $17,784 -$22,024 -$4,240
Medford 2BR $26,040 -$25,775 $265
Medford 3BR $33,144 -$33,850 -$706
Medford 4BR $44,076 -$39,185 $4,891
Medford 5BR $51,936 -$42,505 $9,431

If we compare these figures to other neighborhoods in Boston, we find that Medford actually holds the highest projected net operating income for 5 bedroom properties and the 6th highest 4 bedroom NOI.  Even 2 and 3 bedroom properties are close to breaking even, which means there are plenty of profitable investment opportunities out there for those size properties.

So if you’re planning on investing in Medford, go big.  Based on the most recent data, lower prices for larger properties combined with relatively high rent prices suggests that investors are looking good in Medford.