Rental investment within 100 miles radius of Washington DC

14 Replies

Hi, and Happy Holidays to All - I'm new to BP and overall new to REI.

I'm here to learn and seek advices from the more experience investors so i can make a well informed decision on my first rental investment (buy and hold).  

Being local to the Northern Virginia (NoVA - WashDC suburbs) markets, the prices are relatively high and generally out of my $275k pricing budget.

Originally i was looking for a condo in reston and other desirable areas (arlington, vienna, etc), however the condo fees can range from 200s to 600s+/mo. this will likely decrease the cash flow and therefore may not work.  

Question is:  besides NoVA areas and within 100 miles radius, are there other areas that meet the following requirements:

  • easy to rent
  • low vacancy
  • positive cash flow
  • up and coming
  • appreciation
  • ready to rent or minor repairs
  • up to 275k price

appreciate your thoughts.

@Dang Tran
In PG County you can find townhouses or condos in that price range or BALTIMORE which will provide cash flow, these are in C areas.

You will cash flow on these but do not bank on any appreciation. Also if your looking for cash flow finding turnkey is a little more difficult. If you find a property that may need $20-30k of work you can get better returns

You wont get a ton of cash flow and appreciation in the area. One or the other. Typically better cash flownin the out lying areas, and appreciation potential increases the closer into DC you get. Also you see demamd for rentals increase the closer you get, so the outlying areas are a little harder to rent.  

You might consider Baltimore.  There's a big rental market in the city.  Obviously, you'll need to familiarize yourself with the appropriate neighborhoods that meet your criteria, but I think your price range would be a great fit.

Look for single family homes with mother-in-law/Au-pair suites or attached apartment. They generally sell at market prices but having two doors can generate more income. Also, try homes with detached garages that can be rented separately as storage.

I have 6 doors (each property has 2 doors) in Anne Arundel County (Annapolis area) and another 2 unit under contract. All were marketed as single family homes but all are now cash flowing roughly $500/door. All are in B neighborhoods and not in Baltimore. You may need to check with zoning before implementing this approach.

I agree with Russell...you need to pick what your dominant goal is...appreciation or cash flow.  It is harder to cash flow in the nicer Anne Arundel neighborhoods, unless you get creative like Joshua discusses.  I have a rental in Baltimore that cash flows over $600/month but you really need to drive the city to understand the area.  Baltimore presents great returns but crime has to be understood.

Another option you might want to consider if you aren't planning to self manage:

Pick another area of the country to invest in...this becomes much easier if you have a family member or close friend in that area to lean on for help with understanding the market (you can do all the research you want on an area but nothing beats boots on ground).  Do you know any friends or family elsewhere?  

Good luck!

@Dang Tran ...if you are willing to live in the property, you could get a cheap FHA loan 3.5% on a 2-4 unit in DC. The loan limits on a 4 unit in DC go up to $1.2 Mil. For under 50K, you can buy a $1.2 mil property assuming you can work in closing cost. Assume 2.5% of the purchase price in closing cost.

Thanks all for the replies.  I'm contemplating on sticking with NoVA.

In your opinion for the following neighborhoods / communities, how would you rank with respect to: rentability, low vacancy, quality tenants, higher rent, more desirable?

* manchester lakes (22310)

* herndon 20171

* fair lakes 22033

* legato corner 22030

* annandale 22003

* lorton 22079

* kingstowne 22315

* sterling 20165

any recommendation for property manager?

thanks for your thoughts

PG county, college park area has houses in that price range. Could separate the two floors into units and rent out one of them. Would require some work to do that, new kitchen, but in the end you'd have two separate spaces with your mortgage subsidized nicely. One way to go to accomplish that would be FHA 203k loan.

Just bought my first Rental property in the DC Area (PG County to be exact). Currently, I'm getting some contracting work done: plumbing, electrical, flooring, etc. I'm looking to get it ready to be rented out by February 1st, which is when my 1st mortgage payment is due. 

I definitely think I'm paying too much for some of the repairs, and I'm not good at negotiating better prices. So this process is both nerve-wracking but exciting to me. I'll have a ton of questions in the up coming week. Here's a little about the property. 

Bought: $157k (29% down - long story)

Originally: 3 bedroom, 2 bathroom, with an office space (I'm going to frame in a closet in the office, to make it an official 4th bedroom)

Rehab: Estimated Costs $10k - $15k

Current rehab Costs: $11k - $12k

Hoping to rent in between $1750 - $2400

The Housing Choice Voucher Payment standards for the area are $2353 for 3 -bedroom to $2,902 for a 4-bedroom. But I don't know if those rents will hold after a rent reasonability study. 

Rentometer says that the median and average rents for 4 bedrooms in this area range around $1980 - $2000.

Hopefully, this ends up being a great deal and a great step toward Financial Freedom. 

I live down in Waldorf Maryladn and can say this area is growing fast.  A lot of people live here and work in DC.  We also have a large military community here due to Andrews AFB being just a few miles north.  Pretty wide range of properties here from $700K homes to $200K townhomes.  Might be a good fit for you.  

You should also explore some areas in Calvert County.  I think that will be the next area to see a big population boom because of the easy access to DC along route 4.  Right now, with traffic, it takes just as long to get from DC to Waldorf as it does to take route 4 and get from DC to Calvert County even though Calvert County is further away.

@Dang Tran that’s a wide variety of areas in NOVA. I live in Annandale 22003 and it has its pluses and minuses. I am inside the beltway where appreciation and pricing is much higher than outside the beltway. We do lack easy access to the metro but have buses easily accessible. For rents in the area and tenants it is pretty stable because of higher rent prices.

It will be expensive to get a SFH but condos are under $200k in some areas and towns are in the $300-$400k range. At that range cash flow will be very difficult (as it will be in any area of NOVA)

PG county

NOVA will not give you any appreciation, neither cash flow.

In PG county, stick with safer, higher income areas (western side of 210)

Risk will get you rewarded. I have property in Northern VA, but I bought it during recession. For my next investment I moved closer to DC/ away from traffic

@Dang Tran

There are lots of opportunities in Baltimore as well as PG and Charles counties.  DC also has its upside, but unfortunately the inventory of 4 unit properties is low driving the prices higher.

Best of luck

Stephanie

Originally posted by @Tiana O. :

Just bought my first Rental property in the DC Area (PG County to be exact). Currently, I'm getting some contracting work done: plumbing, electrical, flooring, etc. I'm looking to get it ready to be rented out by February 1st, which is when my 1st mortgage payment is due. 

I definitely think I'm paying too much for some of the repairs, and I'm not good at negotiating better prices. So this process is both nerve-wracking but exciting to me. I'll have a ton of questions in the up coming week. Here's a little about the property. 

Bought: $157k (29% down - long story)

Originally: 3 bedroom, 2 bathroom, with an office space (I'm going to frame in a closet in the office, to make it an official 4th bedroom)

Rehab: Estimated Costs $10k - $15k

Current rehab Costs: $11k - $12k

Hoping to rent in between $1750 - $2400

The Housing Choice Voucher Payment standards for the area are $2353 for 3 -bedroom to $2,902 for a 4-bedroom. But I don't know if those rents will hold after a rent reasonability study. 

Rentometer says that the median and average rents for 4 bedrooms in this area range around $1980 - $2000.

Hopefully, this ends up being a great deal and a great step toward Financial Freedom. 

 If the numbers work the way you calculated, it should be a decent investment.

Good Luck!!!