Capitol Heights, MD Neighborhood

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Capitol Heights, MD Neighborhood

Dallas, TX · Member since 2018 · 64 posts · 10 votes

Hi all,

Anyone have thoughts on the Capitol Heights, MD neighborhood? I'm headed there to view a rowhouse this weekend. What type of neighborhood would you consider it? B or C?

Thanks,

Alex

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Shadonna N.

Developer · . · Member since 2014 · 520 posts · 162 votes

It all depends on your strategy. I'm with @Mark Cruse, if the numbers work they work. Everybody needs a place to live and the rent from a C/D neighborhood spends just as well as from an A/B neighborhood (let's hide the bias). I have rentals in A/B neighborhoods as well as C/D, the money looks the same and tenants are a pain. Where you live may not be where you rent. Is our goal to rent something we would live in? If so why? Is it a perception thing, where we only own A/B homes? These are questions not directed to the poster but asked rhetorically. Put your investor hat on. A rental is a rental.

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Michael Garofalo
Rental Property Investor · Washington, DC · Member since 2018 · 198 posts · 169 votes
7y
Personally I am not a fan. Others may have different opinions, but I would give it C- at best. Crime rates are high, and median income is extremely low. Most of the gentrification and development happening in Northeast DC across the river is likely going to continue to push people out into Capitol Heights.
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Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
Good point. Any others have thoughts? I'm specifically looking at a few places right off Central Ave, less than a mile from the metro.
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Ron Gallagher
Investor · Washington, DC · Member since 2017 · 198 posts · 323 votes
7y
Type the address into Trulia and look at the crime heat map.... if it's dark blue, which I'm guessing it is, then I would consider it a D neighborhood and I wouldn't buy it.
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Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
Will take Trulia's output into consideration, but by that same logic, parts of Dupont, most of U Street and all of Shaw would be considered off-limits, since most parts of these neighborhoods are dark blue on Trulia.
Anyone have direct experience with some of the neighborhoods off of Central Avenue, near Central High School?
Might need to post in the Maryland sub-forum, but thought I'd start here.
Thanks,
Alex
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Greg Johnson
Washington, DC · Member since 2018 · 3 posts · 4 votes
7y
I grew up on the DC side which is on the other side of the Capitol Heights Metro on Central Ave. As a matter of fact my mother still lives on the DC side and because its pretty much surrounded by Seat Pleasant and District Heights its not the most desirable neighborhood. Everything Michael mentioned is true. I would suggest that you look on the DC side of the border that separates Capitol Heights and DC. That area has become really hot. There are still plans to build a new shopping center with residential housing on East Capitol Street which takes you into Capitol Heights MD. I have seen a lot of investor activity there in the last 2yrs.
2 Reply
Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
@Greg Johnson thanks, Greg. Appreciate the insight.
One last question for the group: how about Pepper Mill Village, MD?
I'm checking out these areas this weekend, so wanted a general idea of what I'm in for.
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
7y
There are going to be better and worse parts of Capitol Heights and that whole general area. I imagine you are looking there because of the cheaper price points. They are cheap for a reason. Ive owned a couple of properties down in that very general location before in Suitland and Oxon Hill. They were both bad experiences. Im not a big fan of southern PG County, except for maybe Ft Washington. The northern part of the county from about Mt Ranier northwards Id prefer much better.
But also keep in mind, Im generally an A/B class investor. I like DC west of the rive, Montgomery County, Frederick County much more than any part of PG County. Even in the nicer parts of PG county, your going to have to deal with their sub par sheriffs department which is a real pain.
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Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
Yes, I'm having a harder time finding deals in my price point west of the river in DC, and most of the stuff available in northern PG county are condos with high HOAs that eat into margin.
If you know of any deals within the areas you outlined above or know of investors looking to syndicate, it would be great to chat.
Thanks,
Alex
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Marielle Walter
Investor · Washington, DC · Member since 2013 · 135 posts · 39 votes
7y
@Alex Hymanson I am curious what your price point is? I have invested and looked a good deal in the fort totten area (the investment has been very successful), have also started to look around Silver Spring and Hyattsville. Would be happy to connect with you and learn more and share learnings!
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Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
@Marielle Walter It would be great to connect! I'll send you a "Connect" request now.
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Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
Many parts of Capitol Heights has high crime and very low appreciation. I guess it all depends on what you are used to. For me, if the numbers work and the cashflow is were I need it to be I go for it. I have investments if varying types of neighborhoods. Again, lower prices and a better chance of cashflow but the trade off is the crime and low appreciation. Hope that helps.
1 Reply
Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
@Mark Cruse yes, that helps. And makes sense.
With these cash flow investments in C / D neighborhoods, have you had trouble with tenants not paying rent on time and / or trashing the property?
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Account Closed
Gaithersburg, MD · Member since 2009 · 80 posts · 47 votes
7y
Why not look at Silver Spring or Georgia Avenue going down into DC, lot of development.
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Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
I'd like something that can cash flow, and I can't find anything in that area. You have anything in mind?
0 Reply
Shadonna N.
Developer · . · Member since 2014 · 520 posts · 162 votes
7y
It all depends on your strategy. I'm with @Mark Cruse, if the numbers work they work. Everybody needs a place to live and the rent from a C/D neighborhood spends just as well as from an A/B neighborhood (let's hide the bias). I have rentals in A/B neighborhoods as well as C/D, the money looks the same and tenants are a pain. Where you live may not be where you rent. Is our goal to rent something we would live in? If so why? Is it a perception thing, where we only own A/B homes? These are questions not directed to the poster but asked rhetorically. Put your investor hat on. A rental is a rental.
5 Reply
Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
Originally posted by @Alex Hymanson:

@Mark Cruse yes, that helps. And makes sense.
With these cash flow investments in C / D neighborhoods, have you had trouble with tenants not paying rent on time and / or trashing the property?
If you know how to manage and screen well you can avoid a lot of that, but it takes experience. If not, find a competent property manager and it's all good. I have great managers for a multi unit in Hagerstown and all I do is collect the check.
1 Reply
Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
Originally posted by @Shadonna N.:

It all depends on your strategy. I'm with @Mark Cruse, if the numbers work they work. Everybody needs a place to live and the rent from a C/D neighborhood spends just as well as from an A/B neighborhood (let's hide the bias). I have rentals in A/B neighborhoods as well as C/D, the money looks the same and tenants are a pain. Where you live may not be where you rent. Is our goal to rent something we would live in? If so why? Is it a perception thing, where we only own A/B homes? These are questions not directed to the poster but asked rhetorically. Put your investor hat on. A rental is a rental.
This is my stance exactly. No matter where it is, you can have problems. It's all in the numbers and the level the investor can operate. As with myself, what I tend to see is people who deal in all the various neighborhoods and communities they don't tend to have a baked in bias based on personal sentiment.
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Shadonna N.
Developer · . · Member since 2014 · 520 posts · 162 votes
7y
Agree. A good property manager will help with screening and engaging with the tenants. Personally I try to keep arms length from tenants but I know people who are very hands on and know everything about their tenants. It all depends. Starting in an A/B neighborhood may keep you from investing if you don't have funds. Don't assume an A/B tenant is a "better" tenant. I know of people who have rented to lawyers and a lawyer can take a landlord through the ringer.
You can always start off with a property manager in an area you can afford and move into another neighborhood as your finances change.
Good Luck!
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Alex Hymanson
OP
Dallas, TX · Member since 2018 · 64 posts · 10 votes
7y
@Mark Cruse and @Shadonna N. - thanks for these insights. Makes total sense.
I'm open to a property manager (sounds like a good idea), but I need to ensure the numbers work out with the additional cost.
Do you have a property manager to recommend? Also, what do these property managers charge monthly?
Thanks much,
Alex
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Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
Good property managers who can handle everything are very hard to find. Id say ask around your network and get multiple referrals from credible people who can vouch for them.
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Joseph O
Washington, DC · Member since 2012 · 3 posts · 0 votes
7y

Mark Cruse
from Fort Washington, Maryland
replied 2 days ago

Many parts of Capitol Heights has high crime and very low appreciation.
are you sure?
according to Zillow, Capitol Heights MD has 16.2% appreciation in last 12 months, and will be 8.3% in next 12 months, among the Highest in DC metro area.
https://www.zillow.com/capitol-heights-md/home-values/

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Ron Gallagher
Investor · Washington, DC · Member since 2017 · 198 posts · 323 votes
7y
Originally posted by @Mark Cruse:

Good property managers who can handle everything are very hard to find. Id say ask around your network and get multiple referrals from credible people who can vouch for them.
Mark is exactly right, especially here in DC. If you find a decent property manager in the DC area please let me know, they don't even have to be good, just decent. haha
2 Reply
Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
Originally posted by @Joseph O:

Mark Cruse
from Fort Washington, Maryland
replied 2 days ago

Many parts of Capitol Heights has high crime and very low appreciation.
are you sure?
according to Zillow, Capitol Heights MD has 16.2% appreciation in last 12 months, and will be 8.3% in next 12 months, among the Highest in DC metro area.
https://www.zillow.com/capitol-heights-md/home-values/

Zillow has never been my source of accuracy but in general, without question most of Prince George's County is nowhere near the level of appreciation as DC. I do fix and flips and condo conversions in DC and the appreciation can rise over 10 percent just during renovation. In Capitol Height a home that may sell for 200k, can sell for something very similar across the border in Deanwood for 350k. A guy in my group purchased a home in Capitol Heights and one in NW DC about 15 years ago. They both were purchased for around 150k. The Capitol Height's home now is work 225k and the Petworth home is work 900k. Call it what you want and people need to research as much as they can but if you honestly believe Capitol Heights is a high appreciating investment in the DC region, then by all means go for it. If this is the case I have no idea why thousands of investors are wasting their time fighting to be in DC if all they had to do is go to Capitol Heights.
2 Reply
Shadonna N.
Developer · . · Member since 2014 · 520 posts · 162 votes
7y
You have to have a strategy and be OK with it. For me DC is appreciation and outside of DC is cashflow. Crime is everywhere albeit some places are worst. I have a decent property manger in DC. I can definitely tell you who to avoid. Do your research and do what you are comfortable with.
0 Reply
Mark Cruse
Investor · Fort Washington, MD · Member since 2014 · 1k+ posts · 1k+ votes
7y
Originally posted by @Shadonna N.:

You have to have a strategy and be OK with it. For me DC is appreciation and outside of DC is cashflow. Crime is everywhere albeit some places are worst. I have a decent property manger in DC. I can definitely tell you who to avoid. Do your research and do what you are comfortable with.
Yes, this was pretty much my stance. In most cases I don't hear many looking to Prince George's as a strategy geared towards appreciation. The county has a lot to offer and is great for buy and holds if you get the right numbers. DC is known for the appreciation by nearly everyone. I do business from all those angles and make it work.
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