Suffolk County, MA Cap Rates by Neighborhood

The County-Wide Gross Yield Is a Starting Point, Not an Answer

Suffolk County's aggregate gross yield sits at 5.38%, computed from a $763,473 median home price and $3,423 monthly median rent. That number is close to useless for underwriting any specific deal. The county blends a $3.4 million Seaport condo with a $499,000 Dorchester three-decker, assets that sit in entirely different yield universes. The spread between submarket gross yields in this county likely runs 300–400 basis points. The county median only tells you the midpoint of a very wide distribution.

The more important starting observation: at 18.6x price-to-rent, Suffolk County is priced for appreciation, not yield. That ratio reflects a market where institutional buyers and owner-occupants continuously outbid yield-seeking investors in core neighborhoods, compressing gross yields at the top end. The actionable cap rate story is entirely about which submarket you are in and what your specific cost stack looks like after taxes, insurance, and financing.

Property Tax Drag on Net Cap Rate

Before layering in neighborhood-specific data, every underwriting model needs a tax adjustment, and Boston's residential tax situation has gotten worse in two consecutive years.

The residential tax rate moved from $10.90 per $1,000 (FY2024) to $11.58 (FY2025) to $12.40 (FY2026). On a property purchased at the county median of $763,473, the annual tax bill runs about $9,467. That alone consumes 16.4% of gross annual rent of $41,076. In FY2024, the same property's tax was $8,322, meaning the two-year rate hike has added $1,145 in annual carrying cost, or about 93 basis points of gross yield erased by tax alone.

At a $1,367,500 Back Bay median, the FY2026 tax bill reaches $16,957 annually. At a $699,000 Roslindale median, it lands at $8,669.

Mayor Wu's attempt to shift more tax burden onto commercial properties was rejected by state senators, locking in the residential rate hike with no relief mechanism on the horizon. For a landlord underwriting a Boston acquisition today, stress-testing for another 10–13% residential rate increase in FY2027 is not conservative, it is prudent.

Net cap rates across Suffolk County after taxes, management, vacancy reserves, and maintenance typically land 150–200 basis points below gross yield, putting the realistic net yield on a median-priced property in the 3.3%–3.8% range before debt service.

Neighborhood-by-Neighborhood Gross Yield Analysis

Rent estimates derived from the county ZORI of $3,423 scaled proportionally by submarket price; treat as directional, not precise.

Seaport and Back Bay: Yield Is Not the Story

At $3.4 million, a Seaport condo generating even $5,500 per month in rent produces a gross yield of about 1.9%. After taxes of roughly $42,160 annually on that asset, you are looking at a net yield that is barely positive before any other operating cost. Back Bay at $1,367,500 is only marginally better at the gross level. These neighborhoods are held for appreciation velocity and trophy positioning. Back Bay's median rose 11% in 2024, which at that price point translates to about $150,000 in value gain in a single year. That is the return thesis, not the rent check.

East Boston and Roslindale: The Value Zone

These two neighborhoods represent the most accessible entry point with a viable yield-plus-appreciation profile. East Boston's median of $738,750 with 7.1% year-over-year price growth puts it in a bracket where a small multifamily still pencils at gross yields approaching 5%, and appreciation provides a second return layer. The Suffolk Downs mega-development is driving active flood map revisions (LOMR updates as of July 2025) in East Boston's coastal sections, which creates both risk and opportunity depending on whether a given parcel gains or loses flood zone designation.

Roslindale recorded the fastest appreciation in the city at 12.6% year-over-year to $699,000, and the neighborhood was rezoned under the Squares + Streets framework in 2025, which adds upzoning-driven appreciation potential ahead of density increases. Investors who acquire a small multifamily here before those density changes mature are buying two return sources: current yield at roughly 4.5%–5% gross, and land value uplift as-of-right density expands.

Roxbury and Dorchester: Highest Gross Yield, Highest Execution Risk

Sub-$600,000 entry prices and rents not far below the county median compress the denominator enough to push gross yields toward 6%–7% for well-configured multifamilies. These are the neighborhoods the brief identifies as "value-add plays" with gentrification in progress. Dorchester and East Boston are also cited as the submarkets where multifamily properties are most actively sought. The tradeoff is higher property management intensity, wider variance in tenant credit quality, and renovation capital requirements that are not reflected in the sticker gross yield.

Cap Rate Compression vs. Decompression

Suffolk County is not in a decompression cycle. Price growth of 0.17% year-over-year at the county level and rent growth of about 2.3%–2.9% means rents are running ahead of prices right now. That is a mild tailwind for net operating income relative to acquisition cost. However, it is not large enough to shift cap rates when the baseline gross yield is already compressed and the tax rate is rising at 13% annually.

The institutional transaction data reinforces this. A Theater District apartment tower traded at $234 million in July 2026. At that price and Boston rents, the buyer is underwriting a low 4% cap rate or below on a core asset. Private buyers trying to compete in the same neighborhoods face the same cap rate ceiling, set by institutional appetite.

The vacancy rate of 3.2%, the lowest among the 50 largest US metros, gives landlords pricing power that translates to that 2.3%–2.9% annual rent growth. With the national average at 1.0%, Boston multifamily income is compounding faster than most alternatives, which is what justifies the compressed entry yields for long-hold investors.

Flood Insurance Adjustment to Net Yield

Properties in coastal East Boston, South Boston, and Charlestown carry a flood risk premium that directly reduces net yield. FEMA's National Flood Hazard Layer for Massachusetts received updates through July 2025 (effective study date July 8, 2025), and the LOMR activity tied to the Suffolk Downs development has already identified errors in existing county flood maps. A property that gets reclassified into a higher-risk zone faces mandatory flood insurance, which in coastal Massachusetts can run $3,000–$8,000 annually depending on structure type and elevation. On a $700,000 multifamily generating $42,000 in gross annual rent, a $5,000 flood insurance premium alone shaves 70 basis points off effective gross yield.

Verify the current FIRM panel designation on any coastal or harborside acquisition in East Boston or South Boston before closing. The maps are actively changing, and an assumption baked in from a 2023 listing sheet may no longer be accurate.

Cap Rate Outlook

Two forces pull in opposite directions over the next 18–36 months.

Rent growth of 2.3%–2.9% annually, anchored by the 3.2% vacancy rate and a 36.5% homeownership rate that keeps the renter pool structurally deep, supports continued net operating income expansion. The 439,000-worker employment base in healthcare, professional services, and financial services (the finance and insurance sector runs at about three times the national concentration) keeps tenant demand durable.

Against that, three headwinds could widen the gap between gross and net yields. First, another 10%+ residential property tax hike in FY2027 would add roughly another 90–100 basis points of tax drag on a median-priced property. Second, the statewide rent control ballot measure, which cleared a procedural hurdle in September 2025 and could appear on the 2026 ballot, represents a binary cap on rent growth upside. If it passes, the income-growth component of the total return thesis deteriorates sharply for Boston multifamily. Third, the 60 development proposals approved in 2025 totaling 3,773 net new units, plus office-to-residential conversion activity from Boston's vacancy-reduction program, will add supply into specific downtown submarkets over the 2026–2028 period, potentially moderating rents near converted buildings.

For private investors, the clearest cap rate opportunity today is in Roslindale and East Boston at the small multifamily level, where gross yields around 4.5%–5.2% are achievable and both appreciation velocity and upzoning tailwinds are active. Core neighborhood assets in Back Bay or Seaport are appreciation vehicles, not income vehicles, and their underwriting requires a 7–10 year hold assumption to make the math work.

Model your specific deal with our investment property calculator to stress-test your net cap rate against the FY2026 tax rate, a potential rent control scenario, and flood insurance adjustments for coastal parcels.