Rental property in Northern VA or Maryland
Rental Property Investor · Member since 2020 · 9 posts · 4 votes
Rental property in Northern VA or Maryland
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Real Estate Agent · Arlington, VA · Member since 2017 · 98 posts · 50 votes
6yHi Bianca! A lot of the answers to your questions come down to "it depends". Some questions to consider: Are you willing to get a place that doesn't cashflow but is in an area that is likely to appreciate? How long are you planning to live in the property and would you be looking at keeping it if you moved out? Are you willing to commute further (as someone mentioned about Fredericksburg)? If you're interested in chatting more, feel free to send me a PM and we can arrange a time to talk.
28 Replies
- Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes6y
@Bianca Nunes
Reach out to @Russell Brazil he may be able to assist but you will most likely need 20% down payment to cash flow. The area is not an area for cash flow but it’s lower risk because you tend to have better long term tenants and some appreciation.
7e investments53 Reviews - Rental Property Investor · Member since 2020 · 9 posts · 4 votes6y
Thank you Chris, I will reach out to him!
So pretty much if I do 5% down as this will be my primary home, I'll probably not even break even if I rent it?
Any good areas (though affordable) in Nova you would recommend?
- Washington, DC · Member since 2015 · 81 posts · 49 votes6y
@Bianca Nunes In Fairfax County I've seen rents for as high as $1,100/room per month with most of them in the $900-1,000s near Tysons, and they creep up to as high as $1,300 in Arlington. Rents are also pretty strong from student demand near George Mason in Fairfax. As you move south towards Annandale and Springfield they drop to the $600-700s. Alexandria is all over the place with rents depending on which part you look at. In northern VA your best bet to house hack is to get roommates in a condo, a townhouse or a house. This area is short on reasonably priced multifamily. I've noticed that a lot of investors rent houses out by the room to get them to cash flow.
What areas are you interested in and what’s your budget? That will help narrow down the options that are available to you.
- Real Estate Consultant · Chattanooga, TN · Member since 2018 · 384 posts · 330 votes6y
Welcome to real estate investing @Bianca Nunes! There are a lot of factors that go in to what would be the best investing location that change based on your commute, property type, budget, etc. For example, a single family house's price (and rental income) is greatly influenced by the area's school ratings, but a one bedroom condo isn't influenced by school as much since it's unlikely someone with kids will live there.
Since you're looking to house hack initially and then rent it out entirely in the future, that means looking at returns for both scenarios, and that your personal needs need to be considered for that first phase. As @Marshall M. noted, your budget is also a factor.
If I had to generalize, I'd say that many of my clients find investment properties with good returns just outside of Fairfax County, in both Loudoun and Prince William Counties. Areas include Sterling, Manassas, and Leesburg.
I'll message you with some links to rental statistics that may be helpful.
- Member since 2020 · 12 posts · 2 votes6y
@Bianca Nunes Hey I'm a property manager in Maryland. Are you open to a home that needs some renovations? It may be a good way to get a good price. Or are you looking more move-in ready? Do you only want properties that are near the DC, VA border?
- Investor · Fairfax, VA · Member since 2020 · 17 posts · 11 votes6y
@Bianca Nunes I started looking around Manassas and Woodbridge for lower prices, but you very much get what you pay for as far as location goes around here it seems. I'm not sure about Maryland. I have a roommate who works there but lives across the border in Virginia because he says he saves money this way on taxes, so you might want to be careful of that.
I'm still new at this and don't know for sure, but I think maybe a townhouse could be a good choice. If you can find something with 4 bedrooms which are pretty common, you can rent out 3 and at least save some money, though I expect it would be hard to be net positive just on rent. From what I've learned so far it seems the main reason you would try and invest here is for appreciation. Personally I've kind of ruled that out as I'm looking to start focused in on positive cashflow which for me means looking at something long-distance. - Rental Property Investor · Member since 2020 · 9 posts · 4 votes6y
Thanks so much for the reply ! @Marshall M. @Adrienne Green @Account Closed
Since Im doing this own my own, I'd like to stay under 350K and 5% down as this would be my primary home, and yes I'd be open to a house that needs some renovations, I work in DC but only 3 times a week. So as far as my search went the options are:
- condos (but the high condo fee scares me and also kills any cash flow)
- the townhouses - they also have HOA, and the ones that have good school ratings are higher than what Id like to spend
- sfh is out of the question on this price range, even though MD has some , but they all in neighborhoods that look not so nice
- The affordable areas have bad schools and I was told by agents to stay away - such as PG county, Woodbridge, Manassas,
I'm thinking here that with 5 % down I would never have cash flow, specially if I move out. I'm getting a little discouraged :/
- Investor · Fairfax, VA · Member since 2020 · 17 posts · 11 votes6y
@Bianca Nunes Yeah at 5% on 350k I don't think you're likely to get positive cashflow out of a property around here. Someone more knowledgeable should correct me if I'm wrong, but I tried running the numbers for myself and couldn't make it work, which persuaded me not to look at investing around here. Alternatively if your income supports it, you could always rent a place to live and buy elsewhere to start building cashflow, which is what I've decided to try and do after running into the same problem with this area.
- Member since 2019 · 37 posts · 11 votes6y
Hello Bianca,
I came to the same conclusion as you. And honestly, I am looking very much to invest out of state. It is cheaper and for some state/county you can find some good cash flow return.
But I am also a newbie, so I have to make the jump. Which is, in my opinion, the most difficult step.
Good luck.
- 6yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
Hi @Bianca Nunes welcome! I think Fredericksburg, VA would be a great place to do this, but since you work in DC, the commute might be tough.. although lots of people happily take VRE or Amtrak from there. =) Fredericksburg is growing, has proximity to the Quantico base, and the 95 HOV lanes are being extended:
http://www.virginiadot.org/projects/fredericksburg/i-95_express_lanes_fredericksburg_extension.asp
I tend to agree with @Adrienne Green that JUST OUTSIDE Fairfax County is the best place to do this (in VA), but I bet it's also possible in a few closer-in areas, such as Springfield or Alexandria, where there might be "diamond in the rough" older houses and where your commute might not be too bad (train or Metro).I know a fabulous agent in Fredericksburg if you want a recommendation.
- Real Estate Agent · Arlington, VA · Member since 2017 · 98 posts · 50 votes6y
Hi Bianca! A lot of the answers to your questions come down to "it depends". Some questions to consider: Are you willing to get a place that doesn't cashflow but is in an area that is likely to appreciate? How long are you planning to live in the property and would you be looking at keeping it if you moved out? Are you willing to commute further (as someone mentioned about Fredericksburg)? If you're interested in chatting more, feel free to send me a PM and we can arrange a time to talk.
- Rental Property Investor · MA · Member since 2020 · 98 posts · 77 votes6y
@Bianca Nunes
Hi Bianca,
I would look in Fairfax County / Prince Williams county. I think these areas will be the most impacted by the increase in private sector companies.
Follow the Metro, places like Reston and Herndon are still relatively cheap compared to the rest of NVA.
I also believe that the yellow line will eventually need to expand south so places like Lorton/Dale City/Mannassas are interesting.
Good luck in your search !
- Mike
- Rental Property Investor · Woodbridge, VA · Member since 2015 · 75 posts · 68 votes6y
@Bianca Nunes
Hi Bianca! You are actually the first one to trip my key word alerts ever, and since everyone in this discussion has hit at least one of my words my message board is now lighting up like a Christmas tree, so I owe you for that one!
I actually just moved here a few months ago from San Diego and had the exact same dilemma. I happened to stumble on a solution that worked for me, and I hope my experience helps you on your journey!
I found a townhouse (that they seem to still call a condo around here) for $309,000. It is a 3 bd/2 bth in Woodbridge with an unfinished basement, I closed on it, moved in and am in the process of getting a roommate to house hack.
The renovation in the basement is a manageable learning experience for me and you will have to make the assessment of what first level of renovation project works for you.
Some lessons learned from my perspective:
- Because you are living in it I would think about the level of live-in renovation required you want to deal with. I originally thought my tolerance was higher but after some serious looking I reconsidered to a more modest level based on how busy your schedule looks like.
- After a lot of pouring over the MLS and Zillow I settled on Woodbridge VA. If you can find a fairly good deal your mortgage payment on a townhouse is not bad, but I personally recommend putting in the 20-25% since it is your first property to give yourself a decent pool of equity to pull from later.
- I would reach out to a good real estate agent if you have not already, I found one day beat touring from house to house in the surrounding areas beat literally months on the MLS analyzing (yes I kind of did get caught in analysis paralysis) really crystallized my focus on what I really wanted out of my first live-in/househack/future rental. That's not to mention the local area experience they provide that allows you to leverage sometimes decades of their hard work.
- Around Woodbridge if you go under 300 it is very difficult to find a decent property that will meet both criteria for house hacking and qualify for a conventional loan and under 250 would be a very tough sell. My suggestion if you do choose that area that you look above there.
I wish you the best of luck and am really interested in what you might find going through this same process. Later in the year I will be doing this again to find a pure rental. I hope my lessons help you in your first step in your investment journey and from one “newbie” to another wish you the absolute best!
-Sean
- Real Estate Agent · Reston, VA · Member since 2017 · 296 posts · 163 votes6y
@Bianca Nunes You can break up this area into 2: 1. Inside the beltway or hugging the beltway and these are areas that have a lot of value. They are likely to rebound quicker from a market decline and see more appreciation than other areas. Of course the prices are high and very hard to cash flow. 2. Areas outside the beltway but close enough that they offer great value. You might find a SFH in area 2. For example I like Woodbridge area and Fredericksburg. I also pay attention to HOA/condo fees, taxes as this could kill your cash flow. I would consider properties that are in poor shape but not so bad that you will have to go into a full rehab especially when starting out. Yes it will take a bit of work but I think you can find something especially if this market changes.
- Member since 2018 · 33 posts · 10 votes6y
Hi @Bianca Nunes,
If you are not in a rush, I would say attend some of the local real estate meetups to learn what strategies people are using to invest. You might even find a great deal. Purchasing the home as your primary resident is great because you can put less money down to enter the market.
Ways to reduce the burden of your mortgage while living in the property: Roommates and Airbnb (when we get through this pandemic). Having a roommate allows me to pay less than market value for a 1 bedroom apartment in the area while living within walking distance to the metro and my home is appreciating in value.
Things to consider about location: Close to public transportation. Homes close to the metro line, VRE, etc. are pricey, but you can still find a good deal if the property needs some work. We are gaining more jobs in the area, traffic will get worse over time. Homes close to public transportation will appreciate in value. For areas not near public transportation, there are other attractions in the area that make people want to live and rent there. Find those areas and see how you can use that to your advantage when you get ready to rent out the property.
Learn about areas on the path of gentrification. The property might be higher than your budget but if you can reduce your cost with a roommate and you have a good plan to rent the property out with positive cashflow after you move out, it could be a great move.
No matter what strategy you choose, think about the impact on your cash while you live in the property. If you want to continue investing you will need to always be saving for your next investment or rental property expenses.
I'm a new investor myself. I am in the process of purchasing my 3rd property so I understand how searching for a property can be discouraging. I hope you find a great deal soon.
- I would look into PG County. Maybe near College Park or close to it. I would do a room rental of a place where 5 rooms could be rented. Don't know how much you would be willing to house hack but if you didn't want to share space maybe you could live in the basement. If you rent the rooms out for enough you could cash flow. With the University of Maryland you could have an ample supply of students though it might be down a little with covid that will be temporary.
- Real Estate Agent · Fairfax, VA · Member since 2015 · 29 posts · 5 votes6y
@Bianca Nunes
Hi there! @Russell Brazil is going to be your go to agent here. He’s extremely resourceful and has wealth of experience as a realtor and investor. He has successfully helped many members here including myself 😄. Best Of luck!!
- Arlington, VA · Member since 2015 · 60 posts · 100 votes6y
You're in NoVA (which is huge), but near the DC border, meaning... probably Arlington? Alexandria? Falls Church? Even as far out as Vienna?
I think you might need to recalibrate your expectations at that price point ($350k). That's... a 1-2 br condo in most of those areas. If you're only putting down 5% down, too, I don't think anyone has mentioned, but you'll have mortgage insurance premium due to FHA financing.
Not to be a wet blanket, but after you move out there is almost no chance you'll break even with rent, much less make a profit, with those numbers.
IMHO, your best bet is to buy a 2-br condo (or townhome) in Shirlington/Alexandria/Arlington and just use the rent from a roommate to offset your housing cost. You probably still won't bank much if/when you move out, but it'll at lease subsidize your living expenses in the meantime.
- Rental Property Investor · Brooke Park Drive · Member since 2018 · 1k+ posts · 2k+ votes6y
What’s the rush wait until you’re married and together you’ll be shopping with a budget of 950k instead of 350k
- Member since 2019 · 4 posts · 0 votes6y
I'm looking to house hack as well once my rent is up. I currently live in Alexandria and everything here is too expensive. I'm currently looking at the Fort Washington area (fairly cheap SFH's, 25 min commute to DC) as well as the area between College Park and Silver Spring where the Purple Line Metro will be running. Any opinions on those areas?
- 6yNicholas L.Pro MemberFlipper/Rehabber · Pittsburgh · Member since 2018 · 6k+ posts · 5k+ votes
@Josh Turskey where do you work? Fort Washington is nice but no metro.
- Member since 2019 · 4 posts · 0 votes6y
Originally posted by @Nicholas L.:
@Josh Turskey where do you work? Fort Washington is nice but no metro.
I work in around the DMV for a large general contractor, so my location changes. Our office is in central Maryland
- Investor · Sarasota, FL · Member since 2015 · 17 posts · 10 votes6y
@Bianca Nunes, I also live in NOVA and looked heavily into this option but after a year of due diligence and research ended up coming to the conclusion that multi-family syndications were a much better a return from a cashflow, equity and return on my own time. Liz Nourse and Russell Brazil are good agents that are familiar with the investment property market you can connect with. Also, there is a Capital REI facebook group which is a good source to connect and learn on the local market. I have found that states with high job & population growth, and industry diversity offer the most compelling opportunities with asymmetric risk. Good luck!
- 6yCassidy BurnsBusiness MemberInvestor · Alexandria, VA · Member since 2016 · 860 posts · 460 votes
Hey @Bianca Nunes , It is definitely possible to "cash flow" in the DMV area using a 3-5% down primary residence loan, you just have to be patient and know the rentals in and out. I say "cash flow" because this is not accounting for maintenance, management, CapEX, but if you buy turkey, most of those expenses are minimal.
Buying in the DMV, you are going to have great equity pay down, tenant security, and POTENTIAL appreciation (this is never guaranteed in any market).
- Real Estate Agent · Vienna, VA · Member since 2016 · 289 posts · 253 votes6y
Originally posted by @Josh Turskey:
I'm looking to house hack as well once my rent is up. I currently live in Alexandria and everything here is too expensive. I'm currently looking at the Fort Washington area (fairly cheap SFH's, 25 min commute to DC) as well as the area between College Park and Silver Spring where the Purple Line Metro will be running. Any opinions on those areas?
Hi Josh,
If you want to stay in NOVA, there are some areas here that work great for house hacking.
I usually find good house hacking properties for my clients in Reston and some pockets in Fairfax. Townhomes with low HOA fees are your best bet for this strategy in this area. We target townhomes with at least 2 BR (with the possibility to add a third) or preferably 3 BR (with the possibility to add a fourth), a walk-outbasement, and close to a metro station or major commuting routes to allow for "easy" commute to DC, MD, or any other area in Northern VA. I try to stay under $400k.
While it’s true that it is hard to find cashflow properties in NOVA, it is a good area for house hacking due to high rent prices. You can rent each room for $800-$1,000/month (depends on location, condition, and private bathroom), which can definitely subsidize and more for your living expenses in one of the most expensive areas of the country.
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