6 Portland, Maine suburbs for property investors – Introduction
With sales inventory at record lows in Maine and so much scarcity in the market, many people are choosing to rent a property for a while, so they have time to shop for homes. There are some interesting factors at play in Maine when it comes to the 2020 and 2021 real estate market, and property managers have some unique opportunities. Cumberland County is home to Portland, which is Maine’s largest city, but there are also many beautiful towns within a reasonable commute that are popular among property managers and investors.
If you speak with enough people in Maine looking for housing right now a few things become clear. First, it can often take more than a year to find a property to purchase that will check enough of your boxes for it to be a reality. Second, even if you do find the right home for sale, keep in mind there might be 5 or 10 other offers for 10-20% over the asking price. Depending on how open-minded potential buyers are to location and doing home renovation projects post-purchase, those buyers may have to consider securing a rental property while searching for their next home.
Maine was a desirable place to live before the pandemic due to its natural beauty, safety, good schools, quality of life, relative low property tax rates, beautiful summers, investment potential and overall value. Now that we have been living with the pandemic for 8 months, we can see trends in the market. Out of state buyers are flooding the Maine real estate market, with many all cash deals. Out of state buyers have even purchased homes site-unseen, relying on their agents and the online listings to make their decision.
With demand continuing to increase as more companies embrace work-from-home policies, let’s take a closer look at this competitive rental market by looking at some statistics, quality of indicators, and fun facts surrounding 6 towns in Cumberland County, all within a reasonable distance of Portland.
- Freeport, Maine
Quality of life & fun facts
Freeport, Maine is 17 miles from Portland making it a desirable location. It ranked as the 30th most populous town in the Pine Tree State with over 8,000 residents. It has a great town center with shopping, restaurants and countless trails, nature preserves, and miles of coastline to enjoy all that Casco Bay has to offer. Freeport is home to L.L. Bean’s flagship store and corporate headquarters since 1912 when Leon Leonwood Bean launched out of the basement of his brother’s clothing shop. The store was in Freeport Corner, and he began to sell the now iconic selling “Bean Boot”. It was called the Maine Hunting Shoe at that time and allowed hunters to keep their feet dry in wet conditions.
Tenants and property owners both appreciate being close to nature for an additional asset to add to the overall value of Freeport. Wolfe’s Neck Woods State Park is only a five-minute drive from downtown Freeport where you would find L.L. Bean and countless outlet clothing stores. The Park was given to the State in 1969 and is located on the southeastern side of Freeport, occupying 244 acres on a narrow peninsula. It is a 5-minute drive from Freeport’s center. It features varied ecosystems including climax white pine and hemlock forests, a salt marsh estuary, and the rocky shorelines on the Harraseeket River and Casco Bay. The park’s residents include ospreys that nest on Googins Island nearby.
Tenants and property owners both appreciate being close to nature for an additional asset to add to the overall value of Freeport. Wolfe’s Neck Woods State Park is only a five-minute drive from downtown Freeport where you would find L.L. Bean and countless outlet clothing stores. The Park was given to the State in 1969 and is located on the southeastern side of Freeport, occupying 244 acres on a narrow peninsula. It is a 5-minute drive from Freeport’s center. It features varied ecosystems including climax white pine and hemlock forests, a salt marsh estuary, and the rocky shorelines on the Harraseeket River and Casco Bay. The park’s residents include ospreys that nest on Googins Island nearby.
Osprey(s)/Googins Island Freeport Maine
Freeport High School is always rated among the top schools in the state, which is highly attractive to renters with school age children. One way to measure the quality of this school is by its high SAT scores. Freeport High School scores were significantly higher than the state average, coming in 10th in the state for Math and Reading, and 11th in Writing in 2007.
Market analysis
Owners and managers make decisions based on critical real estate statistics, not only quality of life. Let us look at a market overview which includes middle tier homes as of September 30th, 2020 according to Zillow.com. $426,527 was the typical home value in Freeport, which has gone up 10.1% over the past year and are forecast to increase another 8.3% in the next year. These are significant percentage increases year-to-year for any property investor or potential owner. Realtor.com can also offer some insight on inventory of single-family and multi-family homes. As of October 26, 2020, there were 9 single family homes available for sale and 1 multifamily home, not including pending offers. We can dig a little deeper on home value if we look at a 2018 American Community Survey from the Census Bureau. The median home value in Freeport was $312,100, which ranked 16th overall for towns in Maine. Median monthly rent was $1,168 which ranked 12th overall.
- Cumberland, Maine
Quality of life & fun Facts
Cumberland, Maine has been described as quiet, quaint, and quintessential, and I think it fits those adjectives perfectly. It is a about a ten-minute drive north of Portland but when you arrive you are in the beautiful countryside and it may seem like you arrived in a little slice of heaven. You will pass some cows and horses along the way, meandering around rolling hills and pastures. This suburb of Portland has a robust farming history, and a small number of working farms remain, for example Spring Brook Farms, Double T Orchards, and Sweetser’s Apple Barrel & Orchards. There is even a goat farm you might want to visit called Sunflower Farm that sells cheese and holds yoga sessions twice a week between June and September, led by instructor Hope Hall. One of the state’s largest agricultural fairs, The Cumberland Fair has been held yearly in Cumberland at the end of September since 1868.
Cumberland, Maine Market Analysis
According to Zillow, typical middle tier home value in Cumberland as of September 30th, 2020 has increased 8.1% in the past year and are now $463,946. This value is projected to increase another 7.4% in the next year. Realtor.com currently lists zero multi family homes for sale, and 13 single family homes, not including pending offers. The typical home value of homes in Cumberland is $463,946. This value is seasonally adjusted and only includes the middle price tier of homes. Cumberland home values have gone up 8.1% over the past year and Zillow predicts they will rise 7.4% in the next year. The 2018 American Community Survey from the Census Bureau ranked median home value 7th overall in the state at $366,900. Median monthly rent ranked 15th overall, 3 spots below Freeport at $1,144.
- Brunswick, Maine
Quality of life & fun facts
Brunswick is a desirable small town of about 20,000 in northern Cumberland County for property owners, landlords and tenants. Its location is ideal as the last large town as you travel “down east” towards Camden and further up the coast to Acadia National Park. It is the home to nationally renowned Bowdoin College, which was ranked 6th best overall among liberal arts colleges in the United States according to the 2021 edition of the U.S. News & World Report. It is an elite academic institution in a beautiful town and a source of local pride. Brunswick was also previously home to the U.S. Naval Air Station Brunswick, which was permanently closed on May 31, 2011. It has since been partially released to redevelopment as “Brunswick Landing”. There will be hundreds of needed residential homes going up in 2021 and beyond. As of 2020, there were 108 units approved already.
Brunswick, Maine Market Analysis
As of September 30th, 2020, Zillow reported that the typical home value of homes for middle tier homes in Brunswick was $325,000. These values have gone up 7.2% in the past one year and the prediction is that they will go up another 7.6% in the next year. This kind of year over year growth is evidence that Brunswick is an excellent place to invest, although there are few homes available on the market currently. To get an idea of the scarcity in the market, Realtor.com tells us as of October 26th, 2020, there were 42 single family homes available, not including pending offers, and 3 multi family homes. That is quite a bit more than Cumberland or Freeport but still not very many homes for potential buyers to choose from. The median home value, according to the 2018 American Community Survey was $236,500 and the median monthly rent was $938, which are both outside of the top 25 Maine cities. Brunswick is a surprisingly affordable place to live considering its amenities, quality of life, and relative short distance from Portland.
- Bowdoinham, Maine
Quality of life & fun facts
Bowdoinham, Maine is smaller and more affordable than some of the other towns featured here. Its population is about 3,000 people. One reason is that is just a little further away from Portland, at 32 miles. What it misses in commuting distance, it makes up for in beauty. Bowdoinham’s location on the west side of Merrymeeting Bay makes it heaven for birdwatchers. It is a stopping point along the flying route for thousands of migrating birds. Along the entire east coast of the US, only the Chesapeake Bay has a higher concentration of waterfowl.
Bowdoinham, Maine Market Analysis
According to Zillow.com, as of September 30th, 2020, the typical home value of middle price tier homes is $235,195. Like the other towns featured here, investors and property owners will be excited to see the values increased 8.3% over the past year and are projected to go up another 7.3% next year. It is a solid investment if you can find a property to purchase. Realtor.com listed only 3 single family homes for sale as of October 26th, 2020, and zero multi-family homes. This could very well change post-pandemic, as many people are not anxious to make big changes during a volatile market. The Census Bureau estimated median home values at $212,600 and median rents at $1,211. Home values were outside the top 25 towns, but median rent was 10th.
- Falmouth, Maine
Quality of life & fun facts
Falmouth, Maine is one of the most sought-after towns in the state because of its proximity to Portland, its location bordering Casco Bay, its well reputed public-school system, and its private clubs. It offers one of the largest marinas in Maine as well as 3 private golf clubs, 2 of which were built within the last 40 years – 1986 and 1988. Falmouth was dubbed the “Top City to Live and Learn” by Forbes in 2011 and has only bettered its reputation since then. Mackworth Island is connected to land by a small bridge and is one of the most visited public parks in the area, with a beautiful 2+ miles hiking trail that goes around the island featuring amazing views of the bay. It is dog friendly but has a limited number of parking spaces which are usually taken up during the warmer months of the year.
Falmouth, Maine Market Analysis
As of September 2020, Zillow.com listed 22 single family homes available for purchase, not including pending offers and zero multifamily homes available. Property owners who live out of state often use property managers so that they do not have to worry about all the attention and upkeep that older homes require. Multi-family homes can be very profitable for owners, if managed properly. The 2018 American Community Survey ranked Falmouth number 1 in both median home value ($430,000) and median monthly rent ($1,528.)
- Yarmouth, Maine
Quality of life & fun facts
Yarmouth, Maine is just north of Falmouth and south of Freeport. It is desirable as well for its great public schools and location, and it has grown a lot over the past decade or so. Yarmouth’s proximity to the Atlantic Ocean, and its site on the banks of the Royal River, which drains into Casco Bay about a mile away, means it is a key location as a port. The Yarmouth Clam Festival happens once a year and attracts an average of about 120,000 people over the period of the three-day weekend. The population grows by 14 times during this long weekend! The next one is scheduled July 16th, 2021. Today, Yarmouth is an increasingly high-quality dining destination, with thirteen sit-down restaurants as of Spring 2020. This means an average of about one restaurant per square mile which is one of the highest in the United States. U.S. News and World Report rated Yarmouth High School first in the entire state of Maine and 198th in the country, in 2013.
Yarmouth, Maine Market Analysis
As of September 2020, Yarmouth’s typical value of homes in the middle price tier was $484,758 according to Zillow.com. Consistent with the other towns in Maine, property value has significantly increased year to year. Yarmouth home values have gone up 7.3% over the past year and Zillow predicts they will rise 7.1% in the next year. Because these values were already high, these growth rates are impressive to property owners, managers, and investors. Realtor.com listed 11 single family homes for purchase October 26th, not including pending offers, and zero multi-family homes. When we focus on Portland and South Portland in future blog posts, we will see more multi-family homes in those larger cities. The 2018 American Community Survey pegged the median home value in Yarmouth at $357,900 which was 9th overall in the state. Median monthly rent ranked 14th overall, at $1,164.
Other towns in Maine & future blogs for property owners and investors
We have only focused on 6 towns in todays blog post, but there are so many others to highlight in the future. Please check back with us, as Honest Property Management (HPM) will feature information on the wonderful Maine towns of Gardiner, Westbrook, Gorham, Windham, Portland, South Portland, and Scarborough in future blogs. HPM loves giving our clients and renters interesting and useful information on all aspects of property management and real estate, and we will continue to share our research on our dynamic website for anyone to read. Please also look for articles on vacation rentals like Airbnb, Home Away, and VRBO, among others, and topics such as monthly rental income, cash-on-cash return, and occupancy rate. In the meantime, please enjoy the past blogs we have posted and of course we wish you the best on your next trip to Maine, “The Way Life Should Be.”
