Good time to buy an apartment in DC/Northern VA?

Question

Hi All,

I'm trying to make sense of the market right now, specifically in the DC/Northern VA area. Is it a good time to buy an apartment or condo to hold as an investment? I will be in this market for at least 2 years, so I was trying to figure out if buying a studio would be better than renting. I don't have enough savings for a 2-bedroom and therefore would not be able to househack. But I was thinking that I could build up some equity and then rent it out at a premium rent after I move out. Interest rates are low and the are is projected to remain stable over the next 10+ years, so I feel confident in always having a good tenant to rent to. I'm leaning more towards Northern VA due to the relatively friendlier landlord laws vs. those in DC, the job growth due to data centers, Amazon, and warehousing in that area, and the relative affordability.

Any insights would be much appreciated. Thanks!

Jhosdyn Barragan · Answer

DC market is great in terms of future appreciation. In terms of the area I'd check out Alexandria as well as Arlington if you are in the market for a condo. Parking will be 100x easier for you if you plan on driving anywhere and you may get better bang for your buck/better neighborhood class. These areas are also sure to appreciate due to Amazon in Crystal City.

Greg M. · Answer

I'm curious, why would you advise against a condo right now? I'm considering buying a 2BR in rosslyn ... south of 50 and west of iwo jima memorial

Yukiko Nakayama · Answer

I personally don't purchase condominium since you can not control your cash flow due to the condo fee.   Maybe you can take a look at MF syndication or some alternatives?  DC market currently have stop on evictions and have ton of backlog.  If you end up buying one with a tenant who does not pay, that will affect your cash flow since you have to keep paying your mortgage without any rental income.

Cassidy Burns · Answer

@Snehann Kapnadak time is going to be your biggest asset.  Like us all, its very hard to time market cycles, but if you plan on living in the asset for 2 years and then turning it into a long term buy and hold for the remaining 28 years , there is no better time than now.

Concentrate on location, buy where people will always want to live, no matter the market cycle.

Good luck.

Emily Howlett · Answer

I'm a little late to commenting on this, but just an additional thought based on your statement of investing where it makes sense...it may be worth it to find a super cheap place to rent and just amass funds to either buy in the DMV or in another market where you could cashflow right away. The appreciation in this area makes for better rents down the line, but usually getting a good margin so soon after buying can be difficult unless you find the right deal.

Brad Hunter · Answer

Not sure if you've already made your purchase, but you should check out the Potomac Yard / Del Ray neighborhood in Alexandria. They have a metro that is scheduled to open in 2022 and will be a boost to your homes value. There are also major plans to build restaurants/bars/shops under condos and various parks/outdoor spaces in the Potomac Yard area.

Yukiko Nakayama · Answer

I have experience renting both in VA and DC.  It is definitely landlord friendly in VA.  Currently, you can not evict or even file for an eviction for non-payment of rents in DC as of this writing.

Andrew Texin · Answer

I am new to this, so maybe this is the wrong way of looking at it, but I have the mindset that nothing in life is perfect so I don't need the perfect deal, I just need a deal to get started. Hopefully this isn't the wrong way of looking at it since I obviously am not trying to lose money, but at this point in time I am just looking for experience so house hacking a condo seems like the most inexpensive (realistic) option for me in my area.

Snehann Kapnadak · Answer

@Leo Watts Thanks for commenting. $250K would be my max price point. I want to put 10-15% down or less. FHA or 1st Time Homebuyer program. Basically I don't want to pay more than $1300/month in my monthly payment (whether that's a monthly mortgage payment or rent payment), so that's my litmus test as of now. I've ran rough numbers in a rent-buy calculator and my breakeven for when it makes sense to buy is around 2.5 - 4 years (depending on the purchase price, estimated rent payment, etc.).

Looking to invest in Rosslyn, Courthouse, maybe Clarendon area. I need to be fairly close to the DC metro area, so I'm hesitant to go too deep into Arlington.I hear you on condos lagging in appreciation and I also need to make sure they're rentable after I move out. Lots more to think about!

@Andrew Texin Same here haha. I don't want to make someone richer. But I'm also thinking about that phrase "Live/Rent where you want, invest in where it makes sense" and I'm not entirely sure if buying an apartment would make sense right now.

Good time to buy an apartment in DC/Northern VA?

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