Buying DC condo as investment
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Anonymous
| Slightly interested in buying a "cheap" condo (less than $300k) as an investment property. Is this an easy/common thing to do? Any advice? Looking in SW Waterfront area, Capitol Hill, and maybe parts of NE. Hopefully it wouldn't be too hard to find tenants and the rent would cover the cost of mortgage + condo fees, although I have no idea if this is a realistic expectation. Also hoping it will appreciate nicely over time, maybe our kids could live there one day in their 20s, and then we could use it as a second home once we retire. |
Anonymous
| Tenants in DC are easy to find but very hard to get rid of if you get a bad one. I plan on purchasing an investment property in the next year or so but have ruled out DC for this reason, plus I'm much more familiar with the market and laws in the Maryland suburbs. And, how much can you put down? Condo and coop fees can be high so it's hard to be cashflow positive from the get go without a substantial downpayment. And lastly, if you're looking in the Southwest Waterfront area, there are a LOT of coops which can have significant restrictions on investors. Good luck! |
Anonymous
| If you are only slightly interested I wouldn't do it. Being a landlord in DC is a job that carries some serious risk. You will need a basic business license, rent control exemption documentation and schedule and be present for a housing code inspection. Even with everything on the up and up, you can still get a bad tenant that decides not to pay and it will take you 6 months in landlord tenant court to get him or her evicted. Not to mention all of your legal fees. DC is very tenant friendly whether they are paying or not. |
Anonymous
| Do not suggest to be a landlord in dc |
Anonymous
| We are renting out an apartment we bought in 2000. For us, it makes sense because our monthly mortgage fee is so low, but I do not think I would buy a property today with an eye for renting it. In addition to the business license (which isn't hard to get, but it does require dealing with the licensing people on North Capitol), be sure you understand the tax implication. You will pay business taxes to DC on rental income, including that covers the principle on your loan. We also pay federal and state (MD) taxes on this income. I sometimes thing we'd do better to sell the place and park the money in a mutual fund. |
Anonymous
| We have two and use property managers and 'rent jiffy" for licenses etc. Have not had any issues so far....one property is short-term rentals and the other is long term. |
Anonymous
| We've lived in our condo for 27 years, with three years left to payoff the mortgage (even though we rented the first 10 years). We're slightly interested in selling our 11th Floor 1-bedroom condo in Van Ness East overlooking Rock Creek Park and right on top of the Redline Metro. Great building with 24/7 front desk/pools/social room, etc. We want to sell to an investor but also continue to rent it out for the next five years. (No hassle finding a tenant -- it's us). We are willing to carry back the mortgage on a five-year (balloon) basis, so no hassle getting a mortgage regardless of the new Dodd-Frank Qualified Mortgage rules coming in January 2014. |
Anonymous
Why would you want to rent it back? are you looking to cash out on a high market? do you think prices might be heading down and want to lock in your equity? |
Anonymous
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To the 11:24 poster. I'm interested in talking further and hearing more details about your condo. Please email me at jamesdougan39@yahoo.com if you are contemplating selling. Sounds like it may be a win win for us.
Thanks! |
Anonymous
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As an agent I can tell the OP that there are plenty of people crawling around DC looking for investment properties. Most agents I know, plus most agents have clients who are doing this. The investment properties are few and far between at today's inflated prices. You most likely missed the boat, and then some, because I'm having a very tough time finding investments for myself and several others.
The condos priced well enough for at least a break/even go into escalations. If you're not a real estate investor and watching the market day in and day out, it's going to be tough to find an investment and act quickly enough to snag it. Sorry, but that's a truth right there.... |
Anonymous
| Also an agent and completely agree with the above agent. In today's market I would not buy a condo as an investment property in DC. There are of course exceptions but for the most part there are better options in other places. |
Anonymous
What do you think about Baltimore? |
Anonymous
| I think a duplex in DC is a better investment. Of course if you know you are likely to live there in the future and that your kids can live there it could be smart as a retirement plan (particularly if you have the cash flow to operate at a small loss or low profit margin in the short term). If you are local I would advise against using property management (DIY with a good handyman instead) so that you have more control over tenant selection and because it seriously eats into your profit. I have been a DC landlord for 6 yrs btw. If you pick good tenants (employed, semi decent cleaning ethic), rent at a decent price, and don't make the mistake of sinking too much money into your rental, you can make money. |
Anonymous
There are a few properties in the Fairfax Village area of Hillcrest in SE that are up for foreclosure/sale. And likely some homeowners who would be willing to sell. If you are interested in learning more about them, please email me at MeganR.FVVI@gmail.com. |
Anonymous
"don't make the mistake of sinking too much money into your rental" what do you mean by this? putting too much down? or renovating toomuch? |