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Massachusetts market guide
DSCR loans in Salem, MA
Rental financing for Salem investors, qualified on the property's rent.
A DSCR loan in Salem turns on rent versus payment. Citywide medians from the Census are $1,836 a month for rent, $542,800 for home value and $6,114 a year for real estate taxes.
Market snapshot for Salem
For Salem, the latest five-year ACS shows a median gross rent of $1,836 (close to the Massachusetts median of $1,762) and a median owner-occupied value of $542,800 (close to the Massachusetts median of $562,100). The gross rent-to-value ratio for Salem works out to 4.1% (twelve months of median rent divided by median value), a thin gross ratio, which tells you purchase prices are high relative to rent. The figure combines all rental types with all owner-occupied homes, so it is a screening number and not an appraisal.
| Indicator | Massachusetts | Salem | Difference |
|---|---|---|---|
| Share in 2-4 unit buildings | 20.0% | 38.0% | +90% |
| Share of homes detached | 51.1% | 23.9% | -53% |
| Long commuters, 45 min plus | 21.5% | 22.0% | +2% |
| Degree holders, age 25+ | 47.3% | 47.8% | +1% |
| Workers on their own account | 8.8% | 6.9% | -21% |
| Units sitting vacant | 8.1% | 5.7% | -30% |
| Typical construction year | 1964 | 1938 | |
| Annual rent divided by value | 3.8% | 4.1% | +8% |
| Households that rent | 37.5% | 50.3% | +34% |
| Tax as a share of home value | 1.07% | 1.13% | +6% |
| Annual property tax bill, median | $5,992 | $6,114 | +2% |
| Household income, median | $103,960 | $85,153 | -18% |
| Typical owner-occupied value | $562,100 | $542,800 | -3% |
| Typical monthly rent | $1,762 | $1,836 | +4% |
| Residents (Census estimate) | 7,044,056 | 44,795 |
Renting is the norm for many Salem households: 50.3% are renters, well above the Massachusetts median of 37%. The median household brings in $85,153 (about 18% below the Massachusetts median of $103,960), with 55% of renters paying 30 percent or more of income toward rent.
Housing stock and vacancy in Salem
Salem has a deep multifamily layer: roughly 70% of units sit in buildings of two or more, with 38% in duplexes through fourplexes. Median year built is 1938. Older buildings tend to need more capital work, and insurers notice roof and electrical age.
The Census counts 6% of Salem housing units as vacant, with a rental vacancy figure of 2.6%.
How investors should read Salem
Yields near 4.1% make Salem a market for careful buyers. The ratio can still work, usually through a lower loan amount, a rent above the median or a property with several units. Properties built around 1938 often need systems work, so price a capital reserve alongside the payment. A large renter population (50%) supports leasing, though it also means many competing landlords, so condition and price positioning count.
Carrying costs in Salem
Real estate taxes are a line the rent has to cover. The median owner in Salem pays $6,114 a year (close to the Massachusetts median of $5,992), which is about 1.13% of the median home value. Measured against a year of median rent, taxes eat about 28% before any other cost shows up.
Insurance follows risk. FEMA's National Risk Index lists Essex County as relatively high overall, with coastal flooding (very high), ice storms (very high) and riverine flooding (relatively high) as the main drivers.
| Hazard in Essex County, FEMA index | Level |
|---|---|
| Lightning exposure | Relatively High |
| Riverine flooding exposure | Relatively High |
| Ice storms exposure | Very High |
| Coastal flooding exposure | Very High |
| Social vulnerability score | Relatively Low |
| Annualized loss estimate | Relatively High |
| Composite risk | Relatively High |
Flood risk in Salem is parcel by parcel: check the address on FEMA's flood map service, because a mapped high-risk zone means required flood cover and a heavier payment.
What the Salem medians allow
Try the math at the medians. With rent at $1,836 and taxes near $510 a month, a 1.00 DSCR leaves $1,326 for everything else in the payment, a 1.20 ratio leaves $1,020, and a 1.25 ratio leaves $959. Any real property will differ, but the exercise shows how little room insurance and dues can take.
Legal checks before a Salem purchase
This page does not claim to list every Salem rental ordinance. Before you buy, call the city's planning or code office and Essex County to ask about rental registration, inspections and short-term rental permits, and read any association declaration. For Salem short-term hosts, one state-level point stands out. Massachusetts has required short-term rental operators to register with the Department of Revenue since July 1, 2019, and applies the room occupancy excise to rentals of 31 days or less, with local taxes and fees added where a city or town has adopted them.
Massachusetts gives a landlord 30 days after the tenancy ends to return a deposit, an easy deadline to miss without a checklist. As to caps on rent in Salem: Rent control is prohibited statewide by the Massachusetts Rent Control Prohibition Act (c. 40P), which bars rent-control schemes except voluntary ones.
How Salem stacks up against its neighbors
Prices in the comparison range from $510,100 in Lynn to $911,300 in Somerville, with Salem at $542,800.
| Market | Renter share | Tax bill | Home value | Residents | Rent |
|---|---|---|---|---|---|
| Somerville | 66% | $6,186 | $911,300 | 81,036 | $2,517 |
| Boston | 64% | $4,456 | $731,700 | 666,442 | $2,147 |
| Malden | 59% | $4,995 | $633,500 | 65,906 | $2,204 |
| Lynn | 52% | $5,384 | $510,100 | 101,709 | $1,722 |
| Salem | 50% | $6,114 | $542,800 | 44,795 | $1,836 |
Tenants, jobs and anchors in Salem
6.9% of employed residents work for themselves, which matters here because DSCR lending does not ask for tax returns or pay stubs. Three more data points: government workers are about 13% of employment, 48% of adults hold a bachelor's degree or higher and 22% of commuters travel 45 minutes or more.
The Salem area is home to Salem State University and University of Massachusetts. Students and employees at schools like these are a recurring source of rental demand. On the logistics side, air service through Beverly Municipal Airport and Logan International Airport are noted for Salem.
Taking a Salem deal to a lender
Bring the Salem numbers to a loan officer: the rent, the taxes, the insurance and your reserves. Apply online or ask for a quote, and use the calculator to preview the ratio.
More Massachusetts markets
- All Massachusetts DSCR loans
- DSCR loans in Lynn, MA
- DSCR loans in Malden, MA
- DSCR loans in Boston, MA
- DSCR loans in Somerville, MA
- Every market we cover
Sources and data notes
- Encyclopedia entry for Salem
- M.G.L. c. 186, § 15B(1)(b), (1)(d), (2), (3), (4), (5), the Massachusetts deposit law
- Mass.gov TIR 19-3
- State rule cited for Salem hosts: Room occupancy excise
- Census ACS profile behind the Salem figures
- FEMA National Risk Index
Salem's figures are ACS estimates covering 2020 to 2024 and are not exact counts. RedFlagLease (CC BY 4.0) supplies the Massachusetts landlord-tenant notes, and the statutes are linked. Facts were checked in October 2026, and rules change.
Pre-offer checklist
Ask the seller for twelve months of utility bills and any lease on the Salem property, confirm who pays water, trash and lawn care, and get the insurance quote before the inspection period ends so the ratio is tested on real numbers.
DSCR loan availability varies by property and lender program and is not an offer to lend. See our disclosures.
Frequently asked questions
What rent number goes into a Salem, MA DSCR calculation?
On most files the lender uses the lower of the signed lease rent and the appraiser's market rent for the address in Salem. For orientation, the Census median gross rent here is $1,836 a month.
Do taxes and insurance count in the Salem DSCR ratio?
They do. Rent of $1,836 divided by 1.25 gives about $1,469 as the payment ceiling, and $510 of that is spoken for by the median Salem tax bill.
What tax bill should I expect on a Salem rental?
The median bill is $6,114, an effective rate near 1.13%. Because Essex County may reassess at sale, use an estimate on the new price when you run the ratio.
What about VRBO or Airbnb income on a Salem purchase?
Yes on programs built for it, once the use is lawful in Salem. Gather twelve months of statements or a third-party projection, and have Massachusetts tax registration squared away.
When must a Salem landlord return a deposit?
Return is due within 30 days after the tenant leaves. The governing section is M.G.L. c. 186, § 15B(1)(b), (1)(d), (2), (3), (4), (5).
Is flood or storm risk a concern for a Salem rental?
The county scores relatively high overall in FEMA's index, with coastal flooding leading. Parcel-level flood maps and a real insurance quote give the answer that counts.
How do LLC closings work for Salem rentals?
No, but it is common. Entity borrowers supply articles, an operating agreement and an EIN letter, and the owners typically guarantee the loan. A Massachusetts attorney can advise on structure.