Washington, DC · Member since 2017 · 20 posts · 5 votes
I live in the DC area but am interested in Baltimore for RE investments. I know there is high RE tax and know it can change block by block so are there any recommendations of where you can best invest for cash flow?
In particular i'm wondering if the areas around Hopkins (or their medical school) are good for targeting students, or if there are other neighborhoods that can be easily and consistently rented. Or, are there other areas - Fells Point, Patterson Park, other?
Thanks in advance for any suggestions - or links to external resources.
Flipper/Rehabber · Berkeley Springs, WV · Member since 2017 · 164 posts · 103 votes
6y
Hi @Brad Wood Congratulations on deciding to invest in the RE market in Baltimore. I started my RE journey in DC househacking a quad and then about a year and half ago began investing in Baltimore City. Baltimore is different from DC in that there are a lot of "up and coming" neighborhoods depending on who you ask as opposed to DC where things have already up and come. With developed neighborhoods like Fells or Patterson Park you will not find great investment opportunities unless you are doing a flip or a house hack. Because there is high demand for these areas by homeowners it compresses the cap rate and then you can hope for appreciation but there are a lot of people who have been sitting around Baltimore waiting for appreciation while nearby markets like Philly and DC have experienced tremendous growth since 09.
I own a variety of rentals, so to answer your question it depends on what your goal is. If you want to maximize cash flow then room rentals can be very appealing in areas around a hospital or even in class C areas. There is a large part of the population here who rely on cheaper housing options because the incomes here are quite low. The area of the city where a bulk of my out of stat investors are investing in is on the East side where you can buy properties for between $80-90k invest $25k in them and have them appraise at $140k and rent for $1200 - 1400. They aren't home runs but with this strategy you can slowly build up a decent portfolio of rentals that cash flow at $300 a door.
It is a great community here so feel free to ask questions and i'd be happy to help out in any way I can.
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
6y
The majoirty of the neighborhoods can cashflow or be rented easily. It's just multitudes of varying dynamics within the different communities that you must decide is the best fit for what you are trying to do. If your only criteria is renting easily and cashflow, with the right numbers the entire city will fit you scope.
Flipper/Rehabber · Berkeley Springs, WV · Member since 2017 · 164 posts · 103 votes
6y
Hi @Brad Wood Congratulations on deciding to invest in the RE market in Baltimore. I started my RE journey in DC househacking a quad and then about a year and half ago began investing in Baltimore City. Baltimore is different from DC in that there are a lot of "up and coming" neighborhoods depending on who you ask as opposed to DC where things have already up and come. With developed neighborhoods like Fells or Patterson Park you will not find great investment opportunities unless you are doing a flip or a house hack. Because there is high demand for these areas by homeowners it compresses the cap rate and then you can hope for appreciation but there are a lot of people who have been sitting around Baltimore waiting for appreciation while nearby markets like Philly and DC have experienced tremendous growth since 09.
I own a variety of rentals, so to answer your question it depends on what your goal is. If you want to maximize cash flow then room rentals can be very appealing in areas around a hospital or even in class C areas. There is a large part of the population here who rely on cheaper housing options because the incomes here are quite low. The area of the city where a bulk of my out of stat investors are investing in is on the East side where you can buy properties for between $80-90k invest $25k in them and have them appraise at $140k and rent for $1200 - 1400. They aren't home runs but with this strategy you can slowly build up a decent portfolio of rentals that cash flow at $300 a door.
It is a great community here so feel free to ask questions and i'd be happy to help out in any way I can.
Flipper/Rehabber · Berkeley Springs, WV · Member since 2017 · 164 posts · 103 votes
6y
@Tony DiDomenico I made it a point to try a few different models in Baltimore and I took some licks along the way. I think it is a great place to invest if you can manage your tenant and regulatory risks and also figure out how to finance and execute your renovations so that you can pull your money back out have been the biggest hurdles. The last part around the refinance can be a particular challenge but I have figured out some ways to get around that now as well. Happy to share what I know.
Property Manager · Baltimore, MD · Member since 2014 · 1k+ posts · 1k+ votes
6y
There area plenty of great neighborhoods to invest in in Baltimore. To give a more personalized answer of where YOU should consider investing will require more information on your goals, risk tolerance, and how much capital you have to invest. If you can give some more details I'd be happy to help you focus your search!
Arlington, VA · Member since 2017 · 22 posts · 3 votes
6y
Perhaps it might be more beneficial to hear why some investors have chosen certain areas for investing purposes based on whatever investing theories they've formed. I think most of us realize that Baltimore presents a significant amount of areas for investment but I would like to understand why some of the investors are choosing some areas as opposed to others. I realize some of the investors view this as confidential/protected information so thank you in advance to anyone who is willing to share.
Professional Auctioneer · Baltimore, MD · Member since 2015 · 1k+ posts · 1k+ votes
6y
started in Baltimore over 40 years ago, have a large portfolio of houses and commercial, bars, pizza place and FOOD Market.
at 78 years old now, all I want is to get in and get out with cash or equity, I do not buy anymore I only auction and do assignments, did just under $8mm in past two years.
I like fast turn over real estate. Sorry to say that Baltimore is too tenant friendly and dangerous. there is a killing a day in Charm City.
Real Estate Agent · Baltimore, MD · Member since 2016 · 1k+ posts · 782 votes
6y
I second @Joe Norman, you can invest almost anywhere in a Baltimore and make money but our goals strategies, budget plays a huge factor.
If you want to invest around Hopkins University that will require bigger budget where as Hospital would be a different story.
First you should decide who is going to manage the rental, if you want to update anything , how much involvement you will have etc... then you can decide location. Believe me, there will be areas that will make good money but you dont want to go there certain times :D))
Rental Property Investor · Baltimore, MD · Member since 2014 · 247 posts · 321 votes
6y
Regretfully, i don't agree with anyone on this thread. The city is a terrible investment. I'm selling my last few houses i bought several years ago. The government is terrible, taxes are high, crime is out of control, credit doesn't exist in tenants, the city looks at you as revenue, you literally can't force someone to pay water, you could only sue them in civil court. You will regret buying anything, and lose a lot of money within 5 years, unless the government miraculously becomes better. The day i sell my last property in the city is the day I get my life back.
Baltimore, MD · Member since 2019 · 14 posts · 18 votes
6y
My recommendation would be to look just outside the city for investment properties. You can find decent homes for $50k-$90k, put some work into them and have them appraise for $125k-$150k. Run your numbers of course.
In the county, taxes are half what they are in the city, you won't have to deal with the city government, tenants are a bit better because they're likely moving to go to a county school vs the city schools, and you can still get decent rents.
As @Sebastian E. stated above, they won't be home runs, but hit enough singles over time start to score runs.
Real Estate Consultant · Cincinnati, OH · Member since 2020 · 28 posts · 8 votes
6y
@JC Cole any particular areas of Baltimore County you would recommend for a first time investor? I'm in Rockville but have been eyeing Baltimore area for a while since home prices in DC are outrageous
@JC Cole any particular areas of Baltimore County you would recommend for a first time investor? I'm in Rockville but have been eyeing Baltimore area for a while since home prices in DC are outrageous
Ryan, thanks for asking. Just outside the city are some great residential areas with single family and townhomes. The schools are better and the taxes are cut in half compared to the city and the houses cater to families.
I’d try looking in Essex, Middle River, Parkville, Loch Raven, Overlea/Fullerton, Rosedale, and White Marsh on the East side.
Dundalk has some deals as well but is a pretty run down area, similar to the city.
In the city I’d stick close to the water, areas like Canton, Fells Point, Federal Hill, Locust Point....bit pricier but you can get young professionals to rent there as they’re close to the bars and restaurants.once you move away from there, things get choppy block by block.
Happy to provide more details or take a look at anything, lived here my whole life so have a pretty good idea what areas might work.
@Ryan Gandy Reisterstown is a great area for rentals. We have one that we bought it flipped as first time home buyers for 265k put in about 15k and lived in for a few years. We were able to cash flow $280 a month.
@Ryan Gandy Reisterstown is a great area for rentals. We have one that we bought it flipped as first time home buyers for 265k put in about 15k and lived in for a few years. We were able to cash flow $280 a month.
$280 cash flow is not good at all especially for a home that expensive. If you sold the house and made a 40K profit and invested that in the stock market you would be doing better for less work.
Right, and if we knew the what we know now we would have bought it for the original price of 130k and flipped it ourselves, thus having a larger cash flow once we decided to move out. But like I said, we were newly married when we bought it, lived in it for 7 years before turning it into a rental. Just pointing out that the Reisterstown area has a good rental market for cash flowing properties.
Right, and if we knew the what we know now we would have bought it for the original price of 130k and flipped it ourselves, thus having a larger cash flow once we decided to move out. But like I said, we were newly married when we bought it, lived in it for 7 years before turning it into a rental. Just pointing out that the Reisterstown area has a good rental market for cash flowing properties.
Apologies if i sounded like a know it all. From a finance perspective, if you could sell it and have a lump sum of money to invest in a higher roi rental or the market it could make sense to sell. If you don't have a lot of equity then keep renting it :)
Curious to know if you made any investments in Baltimore since you made your post?
I would caution investing directly in Baltimore City unless you know it really well. As you correctly mentioned, Baltimore is block by block. I would instead focus on Baltimore County neighborhoods. Baltimore City data hasn't been encouraging over the last several years - population is shrinking (they saw their biggest drop last year and lowest pop. in a century), crime continues to spike (300+ homicides a year), and businesses are leaving.
I see that you're a DC resident - have you looked at house-hacking here in DC? Completely doable in good up and coming neighborhoods. I always recommend house hacking before you do anything else in RE.