Rental Property in Massachusetts: What the Numbers Actually Look Like

Massachusetts has the lowest effective property tax rate of any state in this series — 1.00% — and it produces a $6,900 annual tax bill, because the statewide median home price is $690,000, the highest in the set.

That is the whole Massachusetts lesson in one sentence. A low rate on an expensive house is not a low bill, and an effective rate is a ratio that tells you nothing at all until you multiply it by a price.

The binding constraint here is price, and price shows up everywhere: in the $172,500 down payment, in the $196,650 of cash you need at closing, in the $4,169.88 a year that a single point of mortgage rate costs — the largest rate sensitivity in this seven-state series — and most of all in the gap between what the property earns and what it needs. The assumed rent below is 0.49% of purchase price per month. Breakeven is 0.83%. That is the widest gap in the series.

And then there is the coast, where Massachusetts is genuinely unlike anywhere else in the country: the FAIR Plan writes a third of the Cape and Islands market, and on the Cape it is frequently the cheapest policy a buyer can actually get rather than the most expensive.

If you take one thing from this article: in Massachusetts, run the arithmetic on the price, not the rate — and if you are anywhere near salt water, get the deductible schedule before you get the inspection.

A note before you start: this is general educational information about how rental property arithmetic works in Massachusetts. It is not investment, tax, insurance, or legal advice, and it is not a recommendation about any property. Massachusetts property tax is assessed and levied city and town by city and town, with separate residential and commercial rates in many municipalities. Talk to a Massachusetts CPA about tax treatment, a licensed Massachusetts insurance agent about a real quote, and a Massachusetts real estate attorney about anything contractual — Massachusetts is an attorney-closing state, so you will have one.

1. What a rental costs to buy here

The statewide median home price is $690,000. The counties in our data bracket it:

• Middlesex County: $755,300, effective property tax rate 1.03%, average insurance $2,009
• Worcester County: $459,800, effective property tax rate 1.28%, average insurance $2,470

Both counties' rates sit above the statewide 1.00%, and the cheaper county carries both the higher rate and the higher premium — the same inversion Pennsylvania and Connecticut showed. Cheap price does not mean cheap carry.

The cash you actually need

Massachusetts's deeds excise is 0.456% of price — $4.56 per $1,000 — and it is customarily the seller's, so it does not land in the buyer's cash-in. Among the seven states in this series, Massachusetts and Connecticut give the buyer the cleanest closing table: no mortgage recording tax as in New York, no split transfer tax as in Pennsylvania, Maryland, or Delaware.

• Closing costs: 2% to 5%. This article uses a 3.5% midpoint.

On the $690,000 statewide median at 25% down:

• Down payment: $690,000 x 0.25 = $172,500
• Loan amount: $517,500
• Closing costs: $690,000 x 3.5% = $24,150
• Total cash in: $196,650

That is the second-largest statewide cash-in figure in this series, behind only New York's downstate counties, and it is entirely a function of price.

Massachusetts's recorded annual home appreciation rate is 2.22% — the second-lowest in this set, ahead of only Maryland's 0.60% and Delaware's 1.00%. That combination is worth naming plainly: high price, negative operating cash flow, and modest appreciation is the least forgiving combination in this series. An analysis that needs appreciation to rescue the cash flow is leaning on a 2.22% figure.

2. The two expenses that decide whether it works

Property tax: a low rate that is not a low bill

Massachusetts's 1.00% effective property tax rate is barely half New Jersey's 1.89% and well below Connecticut's 1.81%. Only Maryland's 0.92% and Delaware's 0.54% are lower in this seven-state set. On the $690,000 example:

$690,000 x 1.00% = $6,900 a year, or $575 a month.

Hold that number against New York, whose 1.45% rate is 45% higher and whose $480,000 median produces $6,960. Two rates far apart, two bills $60 apart. The rate told you almost nothing; the price told you everything.

Here is what the county range does. Take the identical $690,000 house at the identical assumed rent and premium, and change only the effective tax rate:

The Middlesex-to-Worcester range is worth 0.25 percentage points of cap rate and $143.75 a month. That is the smallest county tax effect in this series — Massachusetts's counties are genuinely similar on rate, and the differences between them show up in price instead.

Insurance, over the same house:

Insurance is worth 0.09 points of cap rate across that range. Neither expense is the Massachusetts variable at ordinary levels. Price is. And on the coast, the deductible is — see below.

The landlord-specific property tax point in Massachusetts is real and it works against you. Massachusetts has no broad statewide homestead exemption on the tax bill. What it has instead, under M.G.L. c. 59, § 5C, is an optional local residential exemption that a city or town may adopt, and which explicitly shifts a larger share of the tax burden from owner-occupied homes onto non-owner-occupied and commercial property.

Most Massachusetts municipalities have not adopted it. Several major cities have, including Boston, Cambridge, and Somerville — and in Boston the exemption saved qualifying owner-occupants up to $4,353.74 in the most recent fiscal year measured. Owners must occupy the property as their primary residence as of January 1 and file by the town's deadline, and only one property per owner qualifies.

Read that from the landlord's side. In an adopting city, your rental is on the paying end of that shift. The published effective rate for the municipality is a blend, and a non-owner-occupied property in Boston or Cambridge sits above it. This is not a rounding error — a benefit worth over $4,300 to the owner-occupant next door is money the tax levy has to collect somewhere, and your property is part of somewhere.

Also worth knowing: Massachusetts's separate Declaration of Homestead (M.G.L. c. 188) is creditor protection, not a tax benefit, and does nothing for a rental either.

Practical consequence: if you are buying in Boston, Cambridge, Somerville, or any other municipality that has adopted the residential exemption, do not use a municipal average effective rate. Get the actual assessed value and the actual residential class rate applied to non-exempt property, and recompute.

Insurance and the deductible: a two-market state

The statewide reference figure is $1,846 a year at $300,000 of dwelling coverage with a $1,000 typical all-perils deductible. That is $153.83 a month, and 4.52% of gross rent on the worked example.

Massachusetts is the only state in this seven-state series with a falling premium trend: -2% year over year, against +7.5% in New Jersey and +4.6% in New York.

But the statewide premium is not the coastal story. Massachusetts is a two-market state, and the second market has rules that exist nowhere else.

Inland Massachusetts policies generally carry only a flat all-perils deductible. On Cape Cod, Martha's Vineyard, Nantucket, and the near-coastal South Shore, a separate named-storm percentage deductible is standard, set as a percentage of the Coverage A dwelling limit rather than of the damage.

The FAIR Plan publishes an explicit schedule, and it is the clearest public benchmark available. It scales with both location and dwelling limit:

Read the second row again, because it contains a cliff most buyers never see coming. In coastal Barnstable County, a policy with $599,999 of Coverage A carries a 2% named-storm deductible — $11,999.98. A policy with $600,000 of Coverage A carries 5% — $30,000. One additional dollar of dwelling coverage raises the deductible by $18,000.02.

The same structure, smaller, appears in the last row: elsewhere within half a mile of the coast, going from $499,999 to $500,000 of Coverage A takes the deductible from $4,999.99 to $10,000.

Massachusetts construction runs about $275 per square foot to rebuild, so a 1,500 square foot house has a replacement cost near $412,500 — which is to say that a fairly ordinary Cape house is already well past the $200,000 break that puts Dukes and Nantucket properties at 5%, and a somewhat larger one crosses the $600,000 Barnstable break.

The trigger is narrower than a hurricane deductible in most states, and that is good news. The deductible is triggered only by a storm officially named by the National Hurricane Center. Damage from an ordinary nor'easter or thunderstorm falls under the flat deductible instead. That is a meaningfully better structure than Maryland's, where a hurricane warning anywhere in the state is enough.

On a $300,000 dwelling limit, against the worked example's $20,956.40 of net operating income:

• 1% = $3,000, or 14.32% of a full year's NOI
• 2% = $6,000, or 28.63% of a full year's NOI
• 5% = $15,000, or 71.58% of a full year's NOI

And on the $600,000 Coverage A that a mid-size Cape house can easily require: 5% = $30,000, or 143.15% of a full year's NOI on the statewide example — more than the property earns in a year and a half.

You cannot pass any of it to a tenant. It is not a lease obligation and it does not wait for rent to accumulate. Meanwhile the property is likely uninhabitable, so rent stops at the same moment the deductible comes due — which is what loss-of-rents coverage exists for.

The FAIR Plan, and why Massachusetts coastal advice is backwards

This is the single most important thing to understand about insuring a Massachusetts coastal rental, and it inverts the standard advice in every other state.

The Massachusetts Property Insurance Underwriting Association (MPIUA) is a residual market association in which every company writing basic property insurance in the Commonwealth is required to participate, with losses shared among members in proportion to premium volume. It writes Homeowners, Dwelling Fire, and Commercial Property under Division of Insurance-approved programs, with dwelling coverage available up to $1,000,000 at an insured location and mandatory excess requirements above that.

Note the limit: $1,000,000, against Connecticut's roughly $350,000. Massachusetts's residual market is large enough to actually insure Massachusetts houses.

And it is genuinely large. In 2023 the FAIR Plan wrote 8.3% of Massachusetts home insurance written premium statewide but 33.0% in Barnstable, Dukes and Nantucket counties combined — a third of the Cape and Islands market. That concentration is down from 46.6% in those counties in 2010, so the residual market has shrunk over the long run even as it remains dominant.

The practical consequence: on the Cape and the Islands, the FAIR Plan is frequently the cheapest policy a homeowner can actually buy rather than the most expensive. Standard advice — shop the voluntary market first and treat the residual plan as an expensive last resort — is the wrong instruction here. Get both quotes. Details at https://www.mpiua.com/.

Two consequences for a landlord specifically. First, a Cape rental's insurance line should be quoted from both markets before you model anything. Second, the FAIR Plan's deductible schedule above is not a hypothetical — for a third of Cape and Islands property it is the actual schedule in force.

3. A full worked example

The property. A single-family house at the Massachusetts statewide median of $690,000.

The rent — read this carefully. This site does not carry rent data. The $3,400 a month used below is an assumption chosen to be plausible for a house at that price. It is not a market observation. Pull three to five real comparable listings for the specific city or town and substitute the actual number.

The other assumptions:

• Vacancy: 8% of gross rent
• Property management: 10% of collected rent
• Repairs and maintenance: 5% of gross scheduled rent
• Capital reserve: 5% of gross scheduled rent
• Financing: 25% down, 30-year fixed at 7.00% — the rate is an assumption, not a quote
• No HOA or condo association

Step 1 — income

• Gross scheduled rent: $3,400 x 12 = $40,800
• Vacancy loss: $40,800 x 8% = $3,264
• Effective gross income: $40,800 - $3,264 = $37,536

Step 2 — operating expenses

Management is charged on rent actually collected, not scheduled rent:

• Management: $37,536 x 10% = $3,753.60
• Property tax: $690,000 x 1.00% = $6,900
• Insurance: $1,846
• Maintenance: $40,800 x 5% = $2,040
• Capital reserve: $40,800 x 5% = $2,040
• Total operating expenses: $16,579.60

Expense ratio: $16,579.60 / $37,536 = 44.17% of collected rent — comfortably inside the 35% to 55% band. Property tax is 41.6% of that expense line.

Step 3 — net operating income and cap rate

• NOI = $37,536 - $16,579.60 = $20,956.40
• Cap rate = $20,956.40 / $690,000 = 3.04%

The mortgage is deliberately absent from that figure. Cap rate exists to compare properties independently of how they are financed; putting debt service into it is the most common error in this whole exercise, and it makes two identical houses look like different investments because one buyer put more down.

Step 4 — debt service and cash flow

Loan: $690,000 x 75% = $517,500. At 7.00% over 30 years, principal and interest is $3,442.94 a month, or $41,315.28 a year.

• Annual cash flow = $20,956.40 - $41,315.28 = -$20,358.88
• Monthly cash flow = -$1,696.57
• Debt service coverage ratio = $20,956.40 / $41,315.28 = 0.51

Step 5 — cash-on-cash return

• Cash invested: $196,650 (Section 1)
• Cash-on-cash = -$20,358.88 / $196,650 = -10.35%

Rate sensitivity, since 7.00% was an assumption

• At 6.50%: P&I $3,270.95/mo, annual cash flow -$18,295.00
• At 7.00%: P&I $3,442.94/mo, annual cash flow -$20,358.88
• At 7.50%: P&I $3,618.44/mo, annual cash flow -$22,464.88

A full point of rate is worth $4,169.88 a year — the largest rate sensitivity in this seven-state series, and by a wide margin over Pennsylvania's $2,054.76. That is a direct consequence of the loan being large. In an expensive state, the rate you negotiate is worth more than almost anything else you can control, because everything scales with the loan.

For comparison, the entire Middlesex-to-Worcester property tax difference on this house is $1,725 a year, and the entire in-state insurance range is $624. A single point of mortgage rate is worth nearly 1.8 times both combined.

The simplest version of the same finding

Add up the four bills a lender escrows:

• Principal and interest: $3,442.94
• Property tax: $6,900 / 12 = $575.00
• Insurance: $1,846 / 12 = $153.83
• Total: $4,171.77 a month

Against $3,400 of assumed rent, that is -$771.77 a month before vacancy, management, or a single repair. Note that 82.5% of that PITI is principal and interest. In Massachusetts the mortgage is the expense; the taxes and insurance are, relatively speaking, details.

4. The expenses people leave out

Vacancy, management, and capital reserves do not arrive as invoices. Nobody bills you for the month the house sits empty, or for the roof you will need in nine years, or — if you self-manage — for your own weekends. So they fall out of the mental model, and the property looks better than it is.

Here is the same house with those three removed and everything else identical:

The three omissions are worth $9,057.60 a year — $3,264 of vacancy, $3,753.60 of management, $2,040 of reserve. That is the largest dollar figure of hidden expense anywhere in this series, because all three scale with rent and Massachusetts rents are high. They flatter the cap rate by 1.31 percentage points and hide 44.49% of the annual loss.

Note the expense-ratio row: 26.44% without the omissions, well below the 35% floor of the band most rentals land in. That is the diagnostic. A single-family rental does not cost 26% of its rent to operate.

Vacancy. Eight percent is roughly one month a year, which is what a single clean turnover costs between move-out and the next tenant's first full month. Setting it to zero assumes the house is never empty, including between tenants.

Management. Set it to zero and the return is paying you for your own labor rather than for the property. Self-managing this house saves $3,753.60 a year, lifting NOI to $24,710 and the cap rate to 3.58%, with cash flow improving to -$1,383.77 a month. It is a real saving. It does not fix the deal, and it stops being free the moment you stop being available.

Capital reserves. Roofs, HVAC, water heaters, and flooring have known lives, and Massachusetts has some of the oldest housing stock in the United States. The 5%-of-rent convention used above is one option. A harsher and equally common convention is 1% of purchase price a year for maintenance and 1% for capital, which here is $6,900 each. Run that way: total operating expenses $26,299.60, expense ratio 70.07%, NOI $11,236.40, cap rate 1.63%, cash flow -$2,506.57 a month, DSCR 0.27.

Massachusetts is the state where that choice of convention matters most, because the two conventions diverge most when the price-to-rent ratio is high. Here 1% of price is $6,900 while 5% of rent is $2,040 — a factor of 3.4. In Pennsylvania, on the statewide example, the same two conventions were $3,400 and $1,260 — a factor of 2.7. So the honest cap-rate range for this property is 1.63% to 3.04%, and which end you land on is a decision you make, not a fact about the house.

A coastal fourth omission. The named-storm deductible is not an operating expense and appears in none of these tables — but on a Cape or Islands property it is a cash obligation of $6,000 to $30,000 that can arrive in a year when rent has also stopped. Reserve against it separately.

What would actually have to be true

The rent this property needs. For cash flow to reach zero at this price and this financing, gross scheduled rent must reach about $68,765.49 a year, or $5,730.46 a month — 0.83% of purchase price per month. That is the lowest percentage requirement in this seven-state series, which sounds like good news until you look at the other side: the assumed $3,400 rent is 0.49% of price, the lowest actual ratio in the series. Massachusetts needs less relative to price than New Jersey or Connecticut do, and delivers even less than that.

The price this rent supports. Hold rent at $3,400 and solve for the price at which cash flow reaches zero with 25% down: about $398,648, or 57.78% of the statewide median. Worcester County's $459,800 median is close to that figure; Middlesex's $755,300 is nowhere near it.

The down payment this price needs. Keep the $690,000 price and the $3,400 rent and solve for the loan the NOI can service: about $262,492 — which means roughly $427,508 down, or 61.96% of the price.

5. What actually varies by county here

Massachusetts's county tax rates are unusually close together by the standards of this series. What varies is price, and price is what drives the answer.

Take the identical $690,000 house at $3,400 rent and apply each county's actual rate and premium:

Now run each county at its own real median price:

Middlesex County at $755,300 with an assumed $3,700 rent, 1.03% tax and $2,009 insurance:

• Down payment $188,825, loan $566,475, closing costs $26,435.50, cash in $215,260.50
• Annual property tax $7,779.59. P&I $3,768.77. PITI $4,584.49 against $3,700 rent — -$884.49
• Effective gross income $40,848, operating expenses $18,313.39, expense ratio 44.83%
• NOI $22,534.61, cap rate 2.98%, cash flow -$1,890.89 a month, cash-on-cash -10.54%, DSCR 0.50
• Without vacancy, management and reserves: NOI $32,391.41, cap rate 4.29%, cash flow -$1,069.49 a month, DSCR 0.72
• Breakeven rent $6,297.37 a month (0.83% of price); actual ratio 0.49%

Worcester County at $459,800 with an assumed $2,500 rent, 1.28% tax and $2,470 insurance:

• Down payment $114,950, loan $344,850, closing costs $16,093, cash in $131,043
• Annual property tax $5,885.44. P&I $2,294.30. PITI $2,990.59 against $2,500 rent — -$490.59
• Effective gross income $27,600, operating expenses $14,115.44, expense ratio 51.14%
• NOI $13,484.56, cap rate 2.93%, cash flow -$1,170.59 a month, cash-on-cash -10.72%, DSCR 0.49
• Without vacancy, management and reserves: NOI $20,144.56, cap rate 4.38%, cash flow -$615.59 a month, DSCR 0.73
• Breakeven rent $4,107.95 a month (0.89% of price); actual ratio 0.54%

Look at how little separates them. Middlesex at $755,300 produces a 2.98% cap rate and a -10.54% cash-on-cash. Worcester at $459,800 — 39% cheaper — produces 2.93% and -10.72%. Worcester is slightly worse on both measures, despite costing $295,500 less, because its higher tax rate and higher premium offset the lower price almost exactly.

That is the Massachusetts finding, and it is a useful one: inside Massachusetts, trading down in price does not trade down in return. What it does is trade down in the absolute size of the loss — Worcester loses $1,170.59 a month against Middlesex's $1,890.89 — and in the cash required, $131,043 against $215,260.50. If your constraint is capital, Worcester is meaningfully more accessible. If your constraint is return, the two counties are the same answer.

Three things to check for a specific address, none of which is in a county average:

Whether the municipality has adopted the residential exemption. Boston, Cambridge, and Somerville have. If yours has, your non-owner-occupied rental is on the paying end of a shift worth over $4,300 to the owner-occupant next door, and the published average effective rate understates your bill.

Distance to the coast, measured. The half-mile line appears twice in the FAIR Plan deductible schedule, and it is the difference between a flat deductible and a percentage one.

The Coverage A limit relative to the schedule's breaks. $200,000 in Dukes and Nantucket, $500,000 elsewhere within half a mile of the coast, and $600,000 in coastal Barnstable are the thresholds where the percentage steps up. Knowing where your replacement cost lands relative to them is worth real money.

6. Financing a rental is not financing a home

These are the standard mechanisms across the mortgage market. Any specific rate or overlay is your lender's, not this article's.

Down payment. Conventional financing on a non-owner-occupied one-unit property generally requires more equity than an owner-occupied purchase — 20% is usually the floor and 25% the common expectation, which is why this article models 25%. FHA and VA are not available for a property you do not occupy. The genuine exception is house hacking: a two-to-four-unit property you live in one unit of qualifies for owner-occupied programs, and Massachusetts's two- and three-decker stock makes that a realistic route in Worcester, Somerville, and much of the older Boston metro.

Rate. Investment-property loans price above owner-occupied loans. Fannie Mae and Freddie Mac apply loan-level price adjustments for investment occupancy that scale with loan-to-value and credit score; lenders pass those through as rate or points. The 7.00% modeled above is an assumption — and in Massachusetts, Section 3 shows it is the single most valuable thing on this list to get right.

Conforming limits differ by county here. Middlesex County carries a $962,550 one-unit conforming limit; Worcester County sits at the $832,750 baseline. On a Middlesex purchase near the median, that gap is the difference between conventional and jumbo pricing.

Reserves. Lenders typically require post-closing reserves — months of principal, interest, taxes, and insurance held in liquid assets — scaling with the number of financed properties you own. At the statewide example's $4,171.77 of PITI, six months is $25,030.62, on top of $196,650 of cash in. On a Cape property you want more than that, because a 5% named-storm deductible on a $600,000 Coverage A is $30,000.

Rental income counting. Lenders credit a portion of market or lease rent toward qualifying, not all of it. Ask what percentage yours uses and whether they need an appraiser's rent schedule.

DSCR loans. A debt service coverage ratio loan qualifies the property rather than the borrower, comparing property income to debt service and largely skipping personal income documentation. The trade is a higher rate, a larger down payment, frequent prepayment penalties, and a minimum DSCR — commonly stated at or above 1.0 and often above 1.2.

Every Massachusetts scenario in this article fails that test: 0.51 statewide, 0.50 in Middlesex, 0.49 in Worcester. Stripped of vacancy, management, and reserves the best is 0.73. The DSCR underwriting is telling you the same thing the cash flow line is.

Insurance is a closing condition. On the coast, get a bindable landlord quote — from both the voluntary market and the FAIR Plan — during your inspection period, and read the named-storm deductible off it in dollars.

7. What to check before you buy in this state

The price and the loan, because in Massachusetts they are the analysis.

1. Shop the rate hard. A full point is worth $4,169.88 a year on the statewide example — nearly 1.8 times the entire county tax spread and insurance spread combined.
2. Check the county conforming limit. Middlesex is $962,550; Worcester is $832,750. Crossing into jumbo pricing is worth more than most of the variables in this article.
3. Pick a reserve convention and hold it. Section 4 shows 5%-of-rent and 1%-of-price produce cap rates of 3.04% and 1.63% on the same house — the widest such spread in this series.

The property tax, from the municipality rather than the county.

1. Find out whether the city or town has adopted the residential exemption under M.G.L. c. 59, § 5C. If it has, your rental pays more than the published average, by design.
2. Get the actual assessed value and the actual residential class rate, and recompute the bill from the purchase price.
3. Ask when the municipality last revalued.

The coast, measured rather than estimated.

1. Determine whether the property is within half a mile of the coast, and which county it is in. Those two facts place it on the FAIR Plan deductible schedule.
2. Get the replacement cost estimate, then check it against the schedule's breaks: $200,000 in Dukes and Nantucket, $500,000 elsewhere within half a mile of the coast, $600,000 in coastal Barnstable. One dollar over the Barnstable break moves the deductible from $11,999.98 to $30,000.
3. Get quotes from both the voluntary market and the FAIR Plan. On the Cape and Islands the FAIR Plan is frequently cheaper, which is the reverse of every other state in this series.
4. Confirm the policy carries loss of rents coverage and how many months it pays.
5. Get a flood quote separately, whatever the flood map says. No property policy anywhere covers flood.

The rent, from the market.

1. Pull three to five genuine comparable rentals for the specific city or town and note how long they sat.
2. Divide monthly rent by purchase price. The breakevens computed above were 0.83% statewide, 0.83% in Middlesex, and 0.89% in Worcester, against actual assumed ratios of 0.49%, 0.49%, and 0.54%.

The law, from the statute rather than from an article.

1. Do not take eviction procedure, notice periods, security-deposit handling, or late-fee rules from a blog — including this one. Massachusetts residential tenancies are governed principally by M.G.L. c. 186, with summary process eviction under M.G.L. c. 239. Massachusetts security-deposit law (M.G.L. c. 186, § 15B) is among the strictest in the country and carries real penalties for procedural mistakes — this is not a rule you should learn by getting it wrong. Read the statutes at https://malegislature.gov/Laws/GeneralLaws, start with the Commonwealth's own overview at https://www.mass.gov/info-details/massachusetts-law-about-landlord-and-tenant, and have a Massachusetts landlord-tenant attorney set up your lease and deposit handling before your first tenant.
2. On rent control: Massachusetts voters prohibited rent control by statewide ballot initiative in 1994 (codified at M.G.L. c. 40P). This has been the subject of repeated legislative and municipal proposals since, so confirm the current state of the law and any local measures with your attorney rather than relying on a general statement.
3. Check the city or town separately for rental registration, inspection, and lead-paint requirements. Massachusetts's lead paint law imposes real obligations on owners of pre-1978 rental units where a child under six resides, and given the age of the housing stock this is a live compliance question, not a formality. Get current requirements from the Commonwealth or your attorney.

The money and the tax treatment.

1. Ask a Massachusetts CPA how the property will be taxed, including depreciation, passive activity loss rules, Massachusetts's own treatment of rental income, and treatment on sale — including the deeds excise, which on the way out is yours.

What to do next

Every figure above came from a data file or was computed in front of you. Re-run all of it with your own numbers.

The Massachusetts rental analysis calculator does exactly the work in Sections 3, 4 and 5 — enter your price, your real local rent, and your own vacancy, management, and reserve assumptions, and it produces NOI, cap rate, cash flow, cash-on-cash, and DSCR. It also warns you when you have left out the expenses Section 4 is about, rather than letting them pass silently.

The Massachusetts insurance premium estimator will get you closer to a real figure for a specific dwelling limit than the $1,846 statewide average, and it converts the 1%, 2%, and 5% named-storm deductibles into actual dollars — which, given the FAIR Plan schedule's breaks at $200,000, $500,000, and $600,000 of Coverage A, is exactly the calculation a coastal buyer needs.

The Massachusetts mortgage payment calculator gives you the principal and interest figure for the rate you are actually quoted. In this state that is worth $4,170 a year per point — the highest of any state in this series, and the number most worth your attention.

This article is general educational information about rental property arithmetic in Massachusetts, based on figures current as of August 2026. It is not investment, tax, insurance, or legal advice. The rent figures in the worked examples are stated assumptions, not market data. Property tax is assessed and levied city and town by city and town; the county effective rates used here are averages, not bills. Insurance premiums, deductible schedules, assessments, and mortgage rates change and vary by property. Consult a Massachusetts CPA, a licensed Massachusetts insurance agent, and a Massachusetts real estate attorney before buying.