Small Rhode Island Sees Big Growth Opportunities

The Rhode Island real estate market has become a great place for real estate investors. With just over a million residents, Rhode Island experienced a 13.3% increase in home values over the past year.

While properties may be more limited than in states with larger metropolitan footprints, the Ocean State has multiple cities that offer great opportunities for real estate investors looking to grow their portfolio.

Providence, RI tops the list of Rhode Island cities primed for real estate investing.

The Providence housing market is very competitive. Sellers in Providence receive four offers on average, and homes typically sell after 19 days on the market – down from 23 days in 2021. In August 2022, the median sales price of homes in Providence reached $375,000 – an increase of 7.1% YOY.

Home prices in Providence, Rhode Island have fluctuated monthly since June 2021, hitting a high of $405,500 in June 2022. Increasing home prices have been a factor in driving the city’s rental market.

Renter-occupied households make up 64% of the Providence real estate market, while owner-occupied homes make up 36%.

From October to November 2022, the average rent for a studio apartment in Providence increased by 2%. The average rent for a two-bedroom decreased 3%, while the average rent for a one-bedroom apartment decreased by 1%.

Providence’s Multifamily Real Estate Market

The Rhode Island rental market has experienced low inventory across all housing types. From August 2021 to August 2022, the state saw a decrease of 125 single-family home sales and a decrease of 24 multifamily property sales, according to the Rhode Island Association of Realtors.

However, it’s important to note how the pandemic changed Providence’s multifamily market.

The COVID pandemic created an increased ability to work from home or remotely, leading many people to trade in multifamily living in the city for single-family homes in the suburbs.

However, another trend was for individuals to relocate to a smaller market like Rhode Island to save money. This has bolstered Providence’s demand for multifamily housing.

What Investors Should Know about Providence, RI

Providence’s rental market is surprisingly hot. Single-family and multifamily rentals have made the city a great place to invest. Because Rhode Island is just beginning to see this real estate investment opportunity pick up, now could be the best time to get into the market.

Investors looking to move into the Providence rental market through rental, build to rent and multifamily investment properties can expect to earn about anywhere from $1,900 up to $2,600 for apartment rentals, based on current market trends.

As rent prices increase, investors can feel confident in securing loans for multifamily properties. When it’s time to finance your next multifamily property, it’s important to make sure you partner with the right lender.

As the nationwide premier private lender, our real estate investor financing options are second to none.

Lima One’s stabilized bridge loans, value-add rehab financing, and long-term hold multifamily loans for real estate investors are part of our robust suite of products designed to help every investor regardless of their investment strategy.

We’re different than other hard money lenders in Rhode Island. Our clients have different investment strategies, so we have designed our financing and loan options to allow us to cater to their individualized needs.

Contact us today to discuss your next deal, or if you have a deal in hand, accelerate the process by applying now.