NOVA and DMV Thoughts

[Conner Hitchcock]

Hey all,

I am a new investor and current business owner!  I am getting ready to rent out my first property (townhome) by the end of August in the NOVA area (sterling).  I originally bought it as a primary residence but am transitioning up with the goals of family.  I am making this post to get a feel for what some more experienced investors are thinking in the area, I figured I'd share my perceptions and maybe someone could let me know of theirs and tell me why I could be wrong or right.  Also,  since I am a newbie, I'd love to talk with anyone in the area just to get to know some new folks as well.

My thoughts:

Most of the NOVA area is going to be difficult to make decent COC returns due to the values of the homes (especially starting with less capital). I've seen some discussions regarding the benefit of purchasing low cash flow yielding homes for the benefit of higher long term appreciation. As someone new with limited cash on hand, it either makes it a bit more difficult to get involved doe to the cost or difficult to gain momentum due to lack of cashflow to reinvest. I've thought about buying some of the less expensive condos/apartments in Reston or homes in Manassas, but between HOA and property costs it's still hard to justify.

What are your thoughts on the moving slightly south or west (moving north to MD is also an option).   Front Royal, Linden, Warrenton, Woodbridge; even going as far as Culpepper and Fredericksburg.   What pros and cons do you see?

Pros:  Lower cost to get into the game, potential for future growth with future expansion.

Cons:  Less income comparative to DC/NOVA, investing in a lesser known territory, slower growth and appreciation, less cashflow due to property value/availability/whatever local reason??

Thanks all and I look forward to connecting with you all :)

-Conner 

[Terrell Murray]

I would say it depends what your goals are for the new home. Seems like you are looking for a new primary residence and not a new future investment property. That would determine a few things. Lets say you would like this new home to be a future investment property in a few years. Woodbridge and Fredericksburg are good area to buy if you plan to rent out the home in the future. The areas are reasonably priced to get into. The potential to rent them out at a very competitive rate later is another reason I would look there. You have two reliable markets to rent to, the Military and Federal employees. The Cons are both are more short term, 3 - 5 years but sometime longer. 

[Joaquin Camarasa]

The description you shared, it is accurate. 

The typical situation in most of the properties for rent, it is your exact same situation. 

People buy as primary and then rent it out after a few years. Many buy it as a primary, househack and then rent it out and move to the next househack.

As per the strategy to follow in your specific case, I agree with @Terrell Murray it all depends in your goals and lifestyle.

Factors like your cash available, loan amount you qualify for, work place, schools for kids, only you can determine what fits better your situation. 

[Ika Sargeant]

@Conner Hitchcock, yes greater Washington DC is like what you are describing. Reston you will be adding condo fees and then pool fees. But like you say, appreciation will be bigger. I was just seeing construction  around Wiehle metro station. JW marriot hotel been added and then of course if you look at at Herndon development plans, I thought to myself the home prices will grow in Reston and hopefully hold when there is a down turn. So you and I will probably kick ourselves a few years down the road when we look at the prices of homes. But if you go farther out, make sure you are close to transportation and amenities. I have a property I rent in Stafford and does well because its next to the large park and ride lots with buses heading into DC. Cash flow is better especially where tax rates are lower.

[Chris Seveney]

@Conner Hitchcock

I am a bigger fan of location location location. I think closer to DC the better off you are in VA. Those other areas are by no means bad investments but because of traffic in this area - I don't think they will get the appreciation you would in sterling and long term returns. Just my 2 cents

[Jack Seiden]

Quote from @Conner Hitchcock:

Hey all,

I am a new investor and current business owner!  I am getting ready to rent out my first property (townhome) by the end of August in the NOVA area (sterling).  I originally bought it as a primary residence but am transitioning up with the goals of family.  I am making this post to get a feel for what some more experienced investors are thinking in the area, I figured I'd share my perceptions and maybe someone could let me know of theirs and tell me why I could be wrong or right.  Also,  since I am a newbie, I'd love to talk with anyone in the area just to get to know some new folks as well.

My thoughts:

Most of the NOVA area is going to be difficult to make decent COC returns due to the values of the homes (especially starting with less capital). I've seen some discussions regarding the benefit of purchasing low cash flow yielding homes for the benefit of higher long term appreciation. As someone new with limited cash on hand, it either makes it a bit more difficult to get involved doe to the cost or difficult to gain momentum due to lack of cashflow to reinvest. I've thought about buying some of the less expensive condos/apartments in Reston or homes in Manassas, but between HOA and property costs it's still hard to justify.

What are your thoughts on the moving slightly south or west (moving north to MD is also an option).   Front Royal, Linden, Warrenton, Woodbridge; even going as far as Culpepper and Fredericksburg.   What pros and cons do you see?

Pros:  Lower cost to get into the game, potential for future growth with future expansion.

Cons:  Less income comparative to DC/NOVA, investing in a lesser known territory, slower growth and appreciation, less cashflow due to property value/availability/whatever local reason??

Thanks all and I look forward to connecting with you all :)

-Conner 

Your analysis is spot on! It’s really up to your individual goals, Northern Virginia in particular is probably the hardest part of the metro area. I’ve found slightly more success in Maryland, P.G. And Northern moco specifically.