What should I know before I invest in Baltimore?

Question

Baltimore looks nice and homes are somehow affordable the way I see it. But I am not sure what area of Baltimore is good for long hold for rental properties. Any content on that part would be very helpful.

Also what else do you think the investor should know regarding tax, legal and things related to the tenant in the great city of Baltimore. It seems most of the homes are older and wondering what insurance policies would look like also

So if someone can shade some light on these and general Baltimore related investment, that would be great.

Joe Norman · Answer

There are a lot of Baltimore haters out there, but the fact of the matter is that a lot of people are making money investing here. Baltimore absolutely has its issues (I, personally, wouldn't live there due to the schools and crime), but as the saying goes "Live where you want to live, Invest where the numbers make sense".

Some things to note as an investor: high property tax rate (but assessments tend to be lower), high reliance on voucher tenants, city government is a PIA to deal with.

Get a great Realtor, get a licensed property manager (PMs aren't required to be licensed in MD, FYI) and start scouting neighborhoods.

Kyle Deutschmann · Answer

It's hard to answer this question without knowing what sort of budget, risk tolerance, etc. you're working with. I know investors making money in the 'nice' areas like Canton, Fed Hill, etc. and others making money in areas with $100-175k homes. Anything near the water is probably the most likely to maintain (or grow) in value, but will be harder to cash flow especially at today's mortgage rates. Being close to a hospital (such as Johns Hopkins, University of Maryland Medical Center, Mercy, etc.), a school (UMB, JHU, MICA, etc.), the stadiums, or another anchor employer will help ensure steady tenants will need housing there. Other areas like Upper Fells, near Druid Hill park, and Pigtown I personally believe will improve over time for various reasons.

As others have said, Baltimore has the highest property tax rate in the state (which I hope they eventually change...) and high rate of crime, so you need to be careful and understand where you're buying. Insurance rates are also high because if your neighbor's row home catches fire, there's a good chance yours will too so insurance carriers have to account for that risk.

That being said, it's not all bad here. We've got great restaurants, sports, water views, and it's much more affordable than living in neighboring cities like DC.

Ozzy Sirimsi · Answer

what you should about Baltimore you get what you pay for.

If you are going to look at houses lower than 100K, it can be a huge loss or decent gain, it can be a coin toss.

Anything over 150K or more, you are getting closer to safer areas and lower the risk and lower the cash flow.

You decide what you want basically.

When people says bad stuff, they all invest in areas where you would not get out of their car, get spend close to nothing on houses and complain about it. then go spen 5 times more and suddenly decide that is better.

I am a baltimre investor/agent, I am pretty happy and dont have one house in the hood.

Matthew Paul · Answer

Have you ever been to Baltimore ?

The areas that look nice arent the affordable ones .

Baltimore .... High property taxes , high water bills , worst schools in the state , highest crime rate and murder rate in the state , hard to evict tenants ,  dont count on appreciation .

Baltimore good points ...................................   I am still thinking , give me some time ...........................    The best view I have of Baltimore is in my rear view mirror

Jacob Beg · Answer

Here is my 2 cent worth on the zip codes in and around Baltimore. Those without any annotation, I would, and do buy in. You DO need a rental license to rent in Bmore.

21206

21214

21234

21231

21236

21230

21229

21207 (not as much)

21215 (not as much)21212 (Its ok)

21218 (generally quite rough so unlikely to buy here)

Jack Seiden · Answer

If you don’t know Baltimore I wouldn’t invest there, a ton more risk than you think, I’d buy in Baltimore county it even the eastern shore, maybe you could look into canton or fells point, federal hill in Baltimore, but with property taxes I’m not necessarily sure it’s a better investment than the areas i mentioned above.

Russell Brazil · Answer

You could consider Canton, Federal Hill, Fells Point. Entry pointes will be $375k plus generally.

Tim Jacob · Answer

I would say most points have been highlighted.  I would also say get somewhat familiar with estimating rehab repairs.  On older homes there can be additional infrastructure charges though many have been retrofitted to some extent like most places have changed to copper or cpvc waterline but not from the old castviron drain.  Somethings you can keep but should be familiar as any place old or new will brake down.  Obviously this isn't Baltimore specific as most Eastern and Midwestern cities have the same issues.

I would try to by as turnkey as possible in decent areas unless you want to be involved.  If you are far away I would say get a turnkey property in an A or B area and you can probably get the same agent that sells you the place to lease it.  Managing should not be too difficult then but this depends on how you value your time.  Somewhat really well off might delegate that as well.

Just make sure your agents care a little as many just want to get paid and run away.  A good agent should tell you about properties that are going to be problems due to maintenance or tenant quality.  If they aren't doing that it might not be a good fit if you are starting out.

Most stuff I see in that asset class is close to 200k for a row home for a minimum if mostly turnkey.

Kal Wol · Answer

@Martin Smith I live in Germantown Maryland and I wanted to invest in state or neighboring VA or DC to stay close home as I am starting this journey out.

So Baltimore houses have low entry with high risk. And I am trying to find out if I can get the best area in Baltimore it will solve my problem of low entry and better risk as compared to unknown areas that I don't have visibility.

Also, I am showing lots of interest in Baltimore, and also in some part of DC, and am thinking in a couple of years from now, it might be a good investment opportunity. So these are the driving factors that I am looking into it.

Thanks a lot @Kyle Deutschmann for the great input.

What should I know before I invest in Baltimore?

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