Real Estate Investment in Vermont

Why Invest in Vermont Real Estate?

Vermont, the state that means ‘Green Mountain’ in French, is known for its agricultural roots, tech, manufacturing and energy. Not to mention the ritzy weekend retreats for many New Yorkers. The state boasts high occupancy rates during all four seasons as the landscapes and festivities change. In fact, despite its tiny size, Vermont welcomes close to 13 million visitors annually.

With so many tourists, the real estate market has become more stable over the past several years. It’s home to the lowest crime rate out of all 50 states, which has helped to steady the real estate market as deadly violence continues to rise elsewhere. Depending on the area you want to invest in, however, prices can fluctuate greatly. From an investment standpoint, certain areas in Vermont that are appreciating more than others, which can make one single-family investment more profitable than another, depending on the neighborhood – and sometimes even the street – it’s located on. In other areas, prices remain relatively flat, which makes homes more affordable than many other parts of the country.

Investment Considerations for Vermont Real Estate

There are a number of factors to consider, including:

• Popular Tourist Destination - Tourism fuels Vermont’s economy, and rentals are in-demand year-round. To many, however, Vermont is more or less a tourist destination than a place to call home. The government is trying to change this stigma, however, and paying several lucky people up to $10,000 to move there and become permanent residents. The caveat is that they must work online or be employed outside of the state.
• Affordability - With mortgage rates on the rise, limited supply and a compact rental market, competition for homes is stiff, which is driving prices up in certain areas. And since social security and income taxes are considerably higher than other states, when all of these factors are combined, it’s a deterrant for both retirees and Millenials due to affordability issues.
• Lower than average employment growth - While Vermont has the fifth lowest employment rate in the country, and the states revenue is up almost 7%, employment growth is well below the national average. In fact, in 2017, it increased at a rate of just 0.9%. While residents are educated and well-paid, because costs of living are so high, growth is stagnant since the state isn’t business friendly.
• New Construction costs are high - New construction costs are high in Vermont. While the cost of materials is on-par with the rest of the country, the price of land comes at a higher cost. Zoning laws and planning regulations significantly impact the overall price on developable properties, which sends prices soaring.

What are the Best Markets to Invest in Vermont

Jericho, which was rated as the best place to buy real estate property in Vermont in 2017, is one of the best places for real estate investors to consider. It’s a family friendly area, and house prices have appreciated 1.8% over the last 12 months. The average price for a three-bedroom, two bathroom house in Jericho is $210,000, which is below the national average.

Other promising areas include Charlotte, Stowe and Burlington, since there’s a considerable amount of new construction taking place, stable property values and high demand. The schools in each community are top notch and in Charlotte, over 90% of residents live in purchased homes.