Charles Village - Baltimore, MD

[Lior Solomon]

Hi guys,

I would like to put my first offer on a deal I found in Charles Village, Baltimore, MD and I would like to get your thoughts about it.

It's a SF located 2 blocks from John Hopkins University and 1 blocks from Med start union memorial hospital.

It's a 4 BR 1 BA 1,620 sqft property. $5K tax per year.

The seller is asking around $250K for the property. It's in a move in condition.

My concerns are:

Renting it as a single family will provide around 1.5K a month, which isn't great (I think), it seems I can get a higher cap rate in other neighborhoods. But, if I rent it to students (which is definitely the market) for ~$600-$700 a room this will turn this to a much more interesting deal.

I am also looking into finishing the basement and maybe renting it as well(for another $1000), but that might require zoning the property to a MF.

Thanks in advance!

Lior

[Ned Carey]

Lior, I agree with @J Scott 100%. I would add no market can exceed inflation for very long. As the properties appreciate the become less affordable. This reduces demand, and becomes a counteracting force that pushes values back down towards the long term mean.

I believe Baltimore is still in slow decline and I see nothing in the immediate future to stop it. However I believe it is a great investment because the prices are so low and the rents so high that even with a modest decline the city is still undervalued.