Why Invest in Maine Real Estate?
Renowned for its rocky coastline, spectacular mountains, beautiful rural areas, fascinating culture, and delicious lobster, Maine isn't a very crowded place: the population density is 43.1 people per square miles, while the national average is 79.6. The state mainly attracts tourists, outdoor enthusiasts, and retirees looking for a laid-back place to live. Some of the most important cities are Portland (claiming to host 40% of the state's total population), Lewiston, Bangor, South Portland, and Auburn.
As a result, Maine is a tricky place when it comes to real estate investment. On one hand, the state is a famous retirement living destination and tourism area. This makes it a comfortable choice for real estate investors to own single-family homes and vacation rental properties. On the other hand, there's a shortage of workforce and the population has been fairly flat recently, with about 0.4% population growth over the past years, which is lower than the 0.7% national average.
Maine's economy is relatively diverse, supporting industries like healthcare, retail, tourism, education services, and construction. This translates into good opportunities for the much-needed young workforce, quality healthcare, and useful services offered for residents and visitors. While not the ideal investing setting, real estate investors can see Maine’s retirees’ and tourists’ influx as an opportunity for a steady income stream year-round.
Investment Considerations for Maine Real Estate
There are a number of factors to consider, including:
- Popularity as a retirement living destination - With superb sceneries, peacefulness, endless leisure opportunities, a low cost of living, and one of the lowest crime stats in the US, Maine is a famous retirement haven. 9% of the state's population consists of baby boomers, which is more than the 7% national average. Plus, Maine is home to about 1,336 million people and its 0.4% population growth, even if on the low side, is mainly thanks to retirees moving to this area. This opens doors for real estate investors in single-family homes. With retirees looking to rent out houses in Maine, investors in real estate can pick from a decent number of tenants for their properties, which means a consistent stream of income year-round. And, as retired renters already have a steady monthly income (pension), they can afford to pay rent on time.
- Good rental market - Being a place where many people move after they retire, Maine supports key industries like healthcare and retail. For example, there are plenty of great healthcare facilities, such as Maine Medical Center, Central Maine Medical Center, St Joseph Hospital, and Mercy Hospital. So, with all the retirees in the state, the rental market is pretty good. There's a 28.13% renter fraction (by household units) in Maine. In major cities such as Portland, rent prices have skyrocketed over the past years and, between 2005 and 2015, the numbers of homes that are rented for more than $2,000 per month increased by no less than 97%. This means real estate investors can find tenants for their single-family homes and make a good profit.
- Famous tourism hub – Maine is visited by plenty of tourists every year; there were 36.7 million tourists who explored the state in 2017. Actually, last year, tourists' visits increased by 2.5% statewide and 6% in Portland. The short-term rental market, including Airbnb, has also rapidly grown by 62% statewide in 2017, compared to 2016. All these facts are nothing but awesome news for real estate investors who own vacation rental properties and are looking for a nice, growing profit and a consistent income.
- Affordable entry price of homes - Although Maine hasn’t experienced a high population growth rate, there is still a fair amount of new construction; the median home value estimate is $184,400. Plus, the prices for new homes are affordable: houses sell for about $85,000 in South Berwick, about $199,000 in Lebanon, and about $229,000 in Bangor and Augusta. This is great for real estate investors who can buy affordable new houses and enjoy the growing renting prices.
What are the Best Markets to Invest in Maine?
Right now, single-family homes and vacation rental properties are good choices for Maine real estate investors. As tourism in Portland is experiencing a constant growth, it may be a good idea for investors to keep an eye on vacation rental properties in the city. South Berwick, Lebanon, Bangor, and Augusta, are, on the other hand, a smart call for single-family homes. The entry prices of houses are still affordable, while property values and rent prices are increasing.
Despite its low population growth and labor shortage, Maine is attracting retiree home buyers and renters, as well as tourists every year. This makes it a pretty delicate place for real estate investments, although there certainly are decent cash flow and profit opportunities for investors.
HomeUnion® is the leader in residential real estate investment. With the use of big data and machine learning, we analyze information on millions of single family homes in Maine; and across the United States and calculate home values RENTestimate for every property in Maine. If you’re looking for the best investment properties across the country, visit our comprehensive investment site.