Hello all,

I am new here and just getting started. I have been listening to podcasts which has peaked my interest in real estate investing, however I have struggled to find ways to compete in my current home state of Maryland. I have no interest in investing in higher crime areas (I want to stay out of Baltimore), and am interested in investing in up and coming areas with reasonable prices. My issue is that most of the nearby areas seem very expensive to get into and the home value to rent ratio doesn’t seem as high as other states. I just purchased my first property which I live in now. I’d like to slowly grow a portfolio over time to achieve financial freedom. I work a regular day job as well and have started saving for my second down payment.  

Im curious how others have successfully entered the Maryland or a similar market without investing in the seedier areas. Also, are there any specific areas that are good to look at given my goals?

Any advice is appreciated. Thanks!

Originally posted by @Tim Ellis :

Hello all,

I am new here and just getting started. I have been listening to podcasts which has peaked my interest in real estate investing, however I have struggled to find ways to compete in my current home state of Maryland. I have no interest in investing in higher crime areas (I want to stay out of Baltimore), and am interested in investing in up and coming areas with reasonable prices. My issue is that most of the nearby areas seem very expensive to get into and the home value to rent ratio doesn’t seem as high as other states. I just purchased my first property which I live in now. I’d like to slowly grow a portfolio over time to achieve financial freedom. I work a regular day job as well and have started saving for my second down payment.  

Im curious how others have successfully entered the Maryland or a similar market without investing in the seedier areas. Also, are there any specific areas that are good to look at given my goals?

Any advice is appreciated. Thanks!

 The ratio of rents to price, or what we call yield when we think of it in financial terms, is a measurement of risk, or perceived risk.  Maryland, particularly the DC suburbs are an incredibly low risk area, and so consumate with that the yields are low. Baltimore as you mentioned, has higher crime areas. The risk then is higher there, thus the higher yield.  When you are seeing yields in other states that are higher, thats because the markets perception of risk in those areas, for whatever reason is higher than Maryland.

One of the big make ups though of a low risk market, often is that both the asset value grows substantially over time as does the rents. So in many cases, my own included, Im buying a property not based on the rent I will get now on it, but rather the much higher rent I will get down the road.