I currently live in the DC area and rent in Arlington, but would like to eventually own / rent some real estate. Unfortunately property values out here are outrageous, so I'd like to ideally find something in a gentrifying area that's a bit more affordable.
- Age 34, single, but would like to settle/have kids within the next 5 years
- Current income: 115k. Have enough savings to cover most reasonable 20% down payments.
- Excellent credit
- Currently renting
- Somewhere near a neighborhood in an up and coming area that's not insanely expensive
- Metro within 20min walk or so (might be able to pass on this)
- Do NOT want to live in suburban hell
- 2 bedrooms so I could rent a bedroom out
Reasons I'd like to buy:
- Tired of paying rent (Though my share with a roommate right now is only $900)
- Believe that DC area property values will be maintained/appreciate given the location, employment rates, and shift of market bond money -> real estate
Reasons I shouldn't buy/maybe should wait: (there are a lot)
- Very indecisive on career - which means as I job hunt I could eventually change cities. However, I've been like this for 10 years. I figure if I leave I could always rent it out, though.
- Have only been at current job approximately 10 months, so this may impact lending ability
- At my age, I imagine I'll eventually need more space for kids/etc, though I suppose that's quite a ways off. In 5-6 years I could rent out the place instead
- Considering going back for a masters degree, but that could be a very large student loan which would impact my ability to pay mortgage (or cut into 401k).
Thoughts overall? What could I afford? Should I just keep waiting? But then wait for what? I'm somewhat indecisive across my entire life right now (career is the main driver).
Well, since you can't tell the future, you don't know if you'll actually be starting that family within 5 years....or if you and your family will want to move anyway!
If you worry too terribly much about "what ifs" you'll never buy.
Buy something if you want that you're comfortable with that will also make a good rental later down the line or easy to resell.
Here in the DC, VA, MD area, we have a huge amount of people coming and going. We have military stationed in the area.
The only thing you'll get in walking distance to the Metro is a condo probably and those are crazy high...not even including the monthly condo fees! And you have zero land. "Suburban hell" is really not hell....also, define "suburban". Lots of these outlying towns have plenty to do and places to eat when it comes to entertainment.
You'll get a lot more for your money (and investment) if you get something outside the city. I currently live in Columbia, MD and while it's not right on top of DC, we are located almost halfway between DC and Baltimore. And we have Ft. Meade. When I move on to my next place (I want more land), I'll easily be able to rent out my single family home in Columbia. That house is a keeper for sure. There's plenty of good towns in VA as well.
This is just my opinion. I also see the market going up over the next several years.
Hello, Anon guy,
I believe this investment forum is not an appropriate place to discuss such a personal decision. Your criteria for a personal living space are going to be quite different from those of an investor considering where to invest.
It might be different if you wanted to buy a multiunit and planned to live in one unit and rent out the other(s), so as to pay your mortgage. Or if you were inquiring about how to invest in a sweat-equity property that you could simultaneously inhabit and rehab. Each of those scenarios has a big investment component, and many members of the Bigger Pockets community could give you excellent advice about them.
But I think you are asking for an entirely different kind of assistance.
The advisor you need is probably going to be a good local realtor, who will work through the numbers with you and point you toward the neighborhoods and homes for which you will qualify to buy. Once you start getting out to look at some candidates with the agent, I believe you suddenly will find yourself able to clear away many of the uncertainties that are stopping you. Trying to envision oneself living in one place or another has a way of firming up one's priorities.
I happen to be a realtor and live in the DC area, but I'm primarily an investor, and I don't think I could be of help to you in this very personal journey. But perhaps I could recommend a couple of people for you to check out. I would need to know a little more, like what jurisdictions you would like to explore.
If you think recommendations will help you, please put in a colleague request, and then we can discuss.
Whatever you wind up doing, I wish you the best of luck. It's great that you are thinking of taking the leap that so many in your generation are putting off, i.e., becoming a homeowner. Yay for you!
My first investment in DC was 6 years ago when I bought my first house in an "Up and coming" neighborhood in the city limits. The house was in Petworth, and as those who live around here it has been one of the hottest markets for the past couple years. To the dismay of my Girlfriend, then Fiance, now Wife... the neighborhood wasn't the best. It did get better and better to the point that my the home price doubled (After some minor upgrades).
My advice: Start looking at some of the neighborhoods that have a lot of development and room for prices to grow. I really like the Fort Totten area (Anywhere near the metro) and Brookland. I would also consider homes within walking distance of the Anacostia metro station. I know Anacostia gets a bad reputation, but it is growing and developing and it also is one of the few places left in the city that you can still find some breathing room. Try to find a big home with the potential of a rentable inlaw suite, put some rehab into it and live there for a couple years. Believe me, it will pay off.
Just be sure to be security conscious. Get an alarm and really lock down all parts of your house. New homeowners in "up and coming" neighborhoods are big targets, but in my eyes its all worth it when you sell that house for double a few years later.
I bought in Columbia Heights 9 years ago, which is what Petworth was like 6 years ago, LOL.
If you're not sure about your job situation and whether you will switch jobs or move, why not buy a efficiency or 1BR condo to dip your toe in the water? Those are easily sellable if you have to change jobs or can be rented out fairly quickly.
If you're looking for a house, I think you can still find something in Petworth that's reasonable, and H Street keeps gentrifying and "safer" area boundaries keep moving, giving you more opportunities.
I'm going to second Peter's statement above. There's a pattern in the DC area of various neighborhoods steadily improving and their nearby communities improving in the aftermath, and if you plan well you can settle on (comparatively) reasonably-priced property that will likely appreciate in value as time goes on. The improvements in Columbia Heights have spilled over into Petworth, and for a less densely urban feel you can always consider Silver Spring. As far as I've been able to tell, it's become a higher-demand but not impossibly high-demand area for people looking to settle in DC. A friend of mine recently closed on a home there and will be relocating with his wife and toddler.
But generally speaking, property on the periphery of improving neighborhoods in the DC metro area can prove to be a valuable investment assuming due diligence.
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