Recommended areas for first rental property in Maryland

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Recommended areas for first rental property in Maryland

Erick Guajardo
New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes

Hello everyone! My name is Erick Guajardo, I'm planning to start my REI adventure soon focusing on buy&hold properties and would love to get some advice on where to invest. See I'm fairly new to Maryland and since this is an expensive market I've been struggling on my search for areas with a good entry point that actually make sense as a buy&hold investment. I currently own my primary residence in Glen Burnie so due to distance I've been focusing my search mostly in Baltimore city/county, Anne Arundel Co., Howard Co. and PG Co. but I'm considering any area in MD an option, I just need more direction on where to look.

    I would love to hear from locals or anyone with experience in MD what areas do you consider have a good entry point and a solid rental market for a first rental. 

    Any additional tips welcome!


    Thanks in advance!

    PS. Sorry for any grammar mistakes since English is not my first language. 

    2Reply
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    Ruth Lyons
    Investor · Colorado Springs · Member since 2016 · 234 posts · 150 votes
    6y

    Hi Erick,

    Baltimore county is definitely more investor friendly as far as getting started than Montgomery or Howard county. Harford, PG and Anne Arundel county are mixed. But it all depends on what you’re looking for and how much money you have to invest. Are you looking for class “B “properties, for example? Are you looking for cash flow, appreciation potential or a combination of both? Are you using hard money or traditional bank financing? How much cash do you have for down payment? I am an agent and also an investor… The answers to these questions are really crucial to knowing where to look. My rentals are all B class properties scattered throughout the county and across asset types (condos, towmhomes and single family) to achieve a level of location diversification and potential appreciation because that’s the investing strategy I chose. Many investors want lots of “doors” in C and D class properties rented to Section 8 tenants to get high monthly cash flow. I work with a few investor clients that don’t care about cash flow but are banking on long term appreciation by investing in only A class properties. So it all depends — choose a strategy and find the niches where your strategy will work...

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    • Ruth Lyons
      Investor · Colorado Springs · Member since 2016 · 234 posts · 150 votes
      6y

      Hi Erick,

      Baltimore county is definitely more investor friendly as far as getting started than Montgomery or Howard county. Harford, PG and Anne Arundel county are mixed. But it all depends on what you’re looking for and how much money you have to invest. Are you looking for class “B “properties, for example? Are you looking for cash flow, appreciation potential or a combination of both? Are you using hard money or traditional bank financing? How much cash do you have for down payment? I am an agent and also an investor… The answers to these questions are really crucial to knowing where to look. My rentals are all B class properties scattered throughout the county and across asset types (condos, towmhomes and single family) to achieve a level of location diversification and potential appreciation because that’s the investing strategy I chose. Many investors want lots of “doors” in C and D class properties rented to Section 8 tenants to get high monthly cash flow. I work with a few investor clients that don’t care about cash flow but are banking on long term appreciation by investing in only A class properties. So it all depends — choose a strategy and find the niches where your strategy will work...

      10Reply
    • Russell BrazilBusiness Member
      Moderator
      Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
      6y

      Silver Spring 

      [email protected]301-893-4635Podcast Guest on Show #192
      District Invest Group545 Reviews
      WebsiteView Page
      1Reply
    • Jack Seiden
      Real Estate Agent · Washington DC · Member since 2016 · 847 posts · 656 votes
      6y

      East side of redline in moco, route 1 pg county. and if thats too expensive i like the eastern shore of md. would stay far away from baltimore espically bmore city outside of a class areas.

      1Reply
    • Sam Lewis
      Real Estate Agent · Baltimore, MD · Member since 2018 · 285 posts · 228 votes
      6y

      I am really enjoying investing in BalCo (think Parkville, Middle River, Dundalk, and Essex)

      3Reply
    • Jordan Autrey
      Real Estate Broker · Houston, TX · Member since 2019 · 84 posts · 12 votes
      6y

      @Erick Guajardo great question, my company was looking into this same question today. Maryland looks fo beautiful and it’s has some unique architecture.

      Any agents who been in the market for 3+ years you guys would recommend connecting with ?

      1Reply
    • Erick Guajardo
      OP
      New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes
      6y

      @Ruth Lyons thank you for such a detailed answer.

      Definetly looking for cash flow right now, planning on using hard money then BRRRR. In terms of the which class of property I'm leaning towards I would probably say C or Ds since that would be the best place to look for a BRRRR and because anything above that would probably require a down payment that I would not be able to currently afford.

      1Reply
    • Erick Guajardo
      OP
      New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes
      6y

      @Russell Brazil great. I'll start looking a bit more on that area, thanks for the reply!

      0Reply
    • Erick Guajardo
      OP
      New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes
      6y

      @Jack Seiden I'm very familiar with the areas around route 1 and it's definitely attractive but yes I think the price point is still a bit higher for me. Any places in particular you would recommend on the eastern shore?

      Thanks for the reply!

      0Reply
    • Erick Guajardo
      OP
      New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes
      6y

      @Sam Lewis fantastic, I was thinking on those areas but haven't really looked in detail.

      Thanks for the reply!

      1Reply
    • Erick Guajardo
      OP
      New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes
      6y

      @Jordan Autrey it's definitely a beautiful state, I've had nothing but good experiences. Very business friendly. Best of luck!

      0Reply
    • Antonio A.
      Los Angeles · Member since 2019 · 18 posts · 7 votes
      6y

      having family in Stafford, and living in LA, its tempting to invest out there. Thank you to all for providing areas to research! 

      0Reply
    • Tim JacobPro Member
      Real Estate Agent · Baltimore, MD · Member since 2016 · 520 posts · 379 votes
      6y

      This all depends on goals and the amount of time you want to put into it.   If you stay single family then do you want to do room rentals or whole house rentals. 

      In general if you want to rent rooms target younger people that are in there 20s or early 30s I would say the right parts of Baltimore city or PG county closer to the University of Maryland.  For multifamily being in the same places would be good though don't know if there is much inventory for that in PG county. 

      if you want a family then Baltimore county, Frrederick,  Howard County, AA county, or Montgomery.

      I'd say in general you get too far from Baltimore or DC and finding people will be an issue like the eastern shore or western Maryland.  

      The family option will be more handsoff while the room rental will involve more leasing but if done right can make you a lot more money.  It means more turnover is the issue.  If you delegate to a pm it would still make more sense if all the leasing expenses equal less than the difference which can be over 400 plus in certain areas.

      Asset quality is the last thing.  Understand you get what you pay for.  Most people that crash and burn get bad assets and might combine that with cheap pm and or contractors or ones that will quit due to unreasonable expectations which is a recipe for failure.  A lot of the horror stories from Baltimore city come from people buying a place in a bad neighborhood because its cheap.  The truth is you can do well in any market with the right plan.  

      Let me know if I can help.

      2Reply
    • Stephanie P.Pro Member
      Washington, DC Mortgage Lender/Broker · Member since 2016 · 4k+ posts · 2k+ votes
      6y

      21206, 21214, 21234 and 31239. All solid rental zip codes in Baltimore

      2Reply
    • Serena Appiah
      Investor · Member since 2018 · 3 posts · 1 vote
      6y

      Great discussion! I own a single family home in Silver Spring and a townhouse in Hagerstown (Washington County). I've got enough cash for a healthy 20% - 25% down payment and I'm struggling to find some affordable properties, too. I've been looking in Baltimore County but really wish I could get something in Silver Spring since it would be only a hop, skip, and a jump away. I am planning to buy and hold for about 5 years or more. 

      I've even considered buying in Hagerstown because I've never had problems renting our townhouse in Hagerstown over the past 15 years. You can get a much more affordable place there. But rents are also a bit lower. So to buy there, you would want to make sure the expenses each month are really low to account for lower rents. But there has been no shortage of renters in Hagerstown. 

      I am looking for a fixer up where I can do much of the work myself, though, which is why closer to Silver Spring would be ideal so I can work on the home easily.

      1Reply
    • Bola A.
      Rental Property Investor · Houston, TX · Member since 2014 · 146 posts · 35 votes
      6y

      @Ruth Lyons Will like to connect with you. I am looking for agent with class B properties in Maryland.

      0Reply
    • Alan C.
      Investor · Baltimore, MD · Member since 2015 · 155 posts · 166 votes
      6y

      I would agree with most of the comments, except one about appreciation. 

      While it's true that many if not most properties appreciate if held long enough, my (conservative) philosophy is to buy a property with good cash flow, pay it off ASAP so it has great cash flow and never worry if it appreciates or not. As many in the business will tell you, "you can't eat appreciaton." That is, unless you put more debt on the property and that just reduces your cash flow.

      Many people in real estate will tell you that "you make your money when you buy." 
      If you have little to no cash flow (or even negative cash flow) from a rental, I think you are asking for trouble. Many people I know were buying in 2005-2007 and banking on the crazy appreciation rates. Most of them lost a lot of money and got out of real estate investing entirely.

      If you have good net cash flow and/or a paid off property, it's easier to sleep at night.

      And if the property appreciates, that's the icing on the cake.

      4Reply
    • Alyson Anderson
      Realtor · Harford County, MD · Member since 2020 · 118 posts · 33 votes
      6y

      @Erick Guajardo,

      I have had great luck on the Eastern shore! I am able to get quality, long term tenants into my properties quickly. I try to stay within 30 minutes of the bay bridge but see areas like Cambridge and Denton improving/ appreciating. There is also a few house hacking opportunities I have found.

      I also have had great luck in Cecil county. The price point is very affordable and businesses such as Great Wolf Lodge are moving to that area. I have found several great deals recently for my clients which are great for the BRRR strategy.

      3Reply
    • Erick Guajardo
      OP
      New to Real Estate · MD · Member since 2019 · 7 posts · 4 votes
      6y

      @Alyson Anderson ,

      I keep hearing great things about the eastern shore, I'm not too familiar with the area but it seems like it's a good place to start my search. Thanks so much for the input! 

      0Reply
    • Cardell Montague
      Rental Property Investor · Upper Marlboro, MD · Member since 2020 · 25 posts · 4 votes
      5y

      @Erick Guajardo Hey Erick I think our stratergies and goals are aligned. I have been looking into auctions and foreclosures in the PG county area. A bit concerned about Baltimore, but thats due to not knowing dnough about the market. If you are interested maybe we could chat. Im new to this so chatting with someone with simular goals could help.

      0Reply
    • Cardell Montague
      Rental Property Investor · Upper Marlboro, MD · Member since 2020 · 25 posts · 4 votes
      5y

      @Serena Appiah

      I have been facing the same problem in Maryland. But never thought of Haggerstown or Silverspring. I guess I akways thought they were expensive areas. Back to the drawing board. Thanks.

      0Reply
    • Cardell Montague
      Rental Property Investor · Upper Marlboro, MD · Member since 2020 · 25 posts · 4 votes
      5y

      @Alan C.

      I agree I have 5 properties that are paid off due to be a big Dave Ramsey fan and follower. The cash flow I have on those properties make it much easier tl sleep at night. It also makes you very bankable and attractive to banks as a premium client, when getting loans for future deals. Which is totally against the Ramsey philosophy. Dave would not approve of my next move lol.

      1Reply
    • Cardell Montague
      Rental Property Investor · Upper Marlboro, MD · Member since 2020 · 25 posts · 4 votes
      5y

      @Ruth Lyons

      Hello Ruth I am currently looking for a local realtor that not only works with investors but owns investment properties as well. I have been developing a few questions to ask, so that this newbie can find the right match for me. Would you be interested or open to a coversation with me about possibly being added to your roster.

      0Reply
    • Ruth Lyons
      Investor · Colorado Springs · Member since 2016 · 234 posts · 150 votes
      5y

      Totally agree with Alan C. Appreciation is always icing on the cake. (Sorry for the bold, large type--couldn't change the default for some reason!)

      0Reply
    • Michael Brant
      Hoboken, NJ · Member since 2020 · 6 posts · 6 votes
      5y

      For the Maryland experts, how do you feel about Glen Burnie? Would you consider this Class B or Class C? Seems like the price/rent numbers work here a little better than other areas... Schools are not great though - any insight? Pasadena also seems to have some decent ratio and slightly better schools.

      Thanks for the great insight here so far!

      0Reply
    • Morris M.
      New to Real Estate · Temple Hills, MD · Member since 2019 · 12 posts · 0 votes
      5y

      @Erick Guajardo I'm new as well.

      Would like to network with you as I'm looking to invest in the Baltimore area.

      0Reply
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