Investment property - best location?

[Anonymous]

Buy a 4-unit building in Deanwood, DC for 600k, within walking distance to metro.

[Anonymous]

Investor here - I would buy a duplex or quadplex in a low income neighborhood of DC. I would look at Anacostia, Deanwood (as the previous poster mentioned), and Congress Heights. All of these neighborhoods east of the river will eventually appreciate. It may take 5 years, and it may be 15, but who cares if you're looking for long-term weatlh.

Also, these properties will cashflow today. You'll need to familiarize yourself with Sec. 8 housing (it's a bit tedious to navigate, but well worth it b/cs the govt pays your rent directly). You'll also want to find a handyman who can act as the super b/cs chances are that you will not want to go into these neighborhoods to do the repairs yourself.

Good luck!

[Anonymous]

I wouldn't buy here. There were good deals in good neighborhoods after the crash, but those are all gone now. There are many other cities I'd invest in first before DC at the moment. We're at the top of the market here. Also, the saturation point is not far off as more and more apartment buildings continue to come online. Add that to the fact that everyone and their brother is renting out their old condo, TH, or SFH, and I think we're reaching a point where there are too many rentals for the demand.

[Anonymous]

Anonymous wrote:I wouldn't buy here. There were good deals in good neighborhoods after the crash, but those are all gone now. There are many other cities I'd invest in first before DC at the moment. We're at the top of the market here. Also, the saturation point is not far off as more and more apartment buildings continue to come online. Add that to the fact that everyone and their brother is renting out their old condo, TH, or SFH, and I think we're reaching a point where there are too many rentals for the demand.

Agree. There are a lot of luxury rentals coming onto the market. Tons of people renting out condos too.

[Anonymous]

Anacostia DC

[VArealtor]

8th Ward DC. Hire a handy man/property manager so that you don't personally have to do the inevitable repairs. As the area transitions, you may then consider fixing it up but don't worry about it just yet.

If that's not your cup of tea, consider picking up a condo wherever the FBI lands.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Definitely an amateur. What's wrong with a condo? The benefit is that most items that can go wrong are condo assn's fault, so you dont' have to manage them.

I have both a SFH and condo rental. The condo rental is much easier.

Now as for market, if it was me, I'd pick a 2BR 2BA condo in Bethesda. Lots of new apartments going up, and the 2BA thing makes it really desirable among those who have a roommate. However, $200k won't buy much of anything in Bethesda.

Also who cares about HOA fees? It's a business expense if it's a rental property anyway. Factor it in to your costs.

OP here. Thanks for your thoughts and yes, I'm a bit of an amateur. Here's my thought process around a condo. If the HOA charges $100-$200/month, that is going to eat into my cash flow. Given that I'm going to have a mortgage, that won't leave much for extra cash flow. I do understand your point that a condo or TH might be easier to manage and I will take that into consideration. Generally though, any additional costs, including HOA, that I feel I can eliminate is more money in my pocket.

Question - if there are a lot of new apartments going up in Bethesda, wouldn't that drive rent prices down? Or am I missing something?

Yes, an HOA/condo association costs more than not having one, but so what? You need to look at the total number. For example, I have a rental condo in NW DC and my condo fees are just under $400/month, but I also rent it out for $2,400/month and my mortage is $1,100 month.

As for rent prices in Bethesda, that's a too simplistic view of supply/demand. IMO, Bethesda is not going to go out of style any time soon. It's close to DC and major roadways, and close to the Metro. It also has a decent downtown area in terms of activities and restaurants. That's really driving demand, and probably why all the condos are going up in the first place. One thing I think we can say with certainty is traffic in the DMV will just get worse over time, so the premium of being located close to a metro and close to the center should increase. Where I'd say it's risky is a place like Ashburn or Clarksburg (MD). No nearby metro, not much of a "downtown" and long drives to everything else.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Not going to get much for $200K. Do you have any other money to put in?

OP here. I should have clarified that I am going to get a mortgage and put $200k down so I figure I should be able to afford a property of around $600k.

Buy a house in Pimmit Hills in the low 500s and rent it. The property taxes will be 1/2 of MD, no MD income tax (also double VA), and, no problems evicting people like in DC. Everyone I know who is a landlord says never ever buy a DC rental. Anything you buy in Pimmit now will double or more in 10 years. We are on top of Tysons, and they have already planned and have funded several projects to make the area walkable with walking and biking paths. The area immediately adjacent to Pimmit along magarity will be retail, parks, fields for entertainment like possibly concerts or movies, and walking and biking paths to the rest of tysons. thats my opinion anyway.

[Anonymous]

Anonymous wrote:

Anonymous wrote:

Anonymous wrote:Not going to get much for $200K. Do you have any other money to put in?

OP here. I should have clarified that I am going to get a mortgage and put $200k down so I figure I should be able to afford a property of around $600k.

Buy a house in Pimmit Hills in the low 500s and rent it. The property taxes will be 1/2 of MD, no MD income tax (also double VA), and, no problems evicting people like in DC. Everyone I know who is a landlord says never ever buy a DC rental. Anything you buy in Pimmit now will double or more in 10 years. We are on top of Tysons, and they have already planned and have funded several projects to make the area walkable with walking and biking paths. The area immediately adjacent to Pimmit along magarity will be retail, parks, fields for entertainment like possibly concerts or movies, and walking and biking paths to the rest of tysons. thats my opinion anyway.

Re: taxes
Property taxes are about the same in MD and VA. Although VA may be a bit cheaper in some areas, it is not material.
Income taxes are dependent on where the OP lives, as opposed to where the rental property is.

[Anonymous]

Look into rental laws. DC is an awful place for landlords. probably the beach is your best option.

[Anonymous]

Houses around the Ft. Totten metro are going for less than $400,000, but prices and rents are rising in the area. I wouldn't want a big mortgage on a rental property because you'll have higher expenses to cover when you have a gap in tenants. Don't forget repair costs and property insurance, which is higher for rental properties than owner-occupied homes.

[Anonymous]

I would also check around the Silver Spring metro in Montgomery County.

[Anonymous]

Anonymous wrote:I wouldn't buy here. There were good deals in good neighborhoods after the crash, but those are all gone now. There are many other cities I'd invest in first before DC at the moment. We're at the top of the market here. Also, the saturation point is not far off as more and more apartment buildings continue to come online. Add that to the fact that everyone and their brother is renting out their old condo, TH, or SFH, and I think we're reaching a point where there are too many rentals for the demand.

OP here. Interesting perspective. I can see what you're saying but after living in different parts of the US, I can say that rents are noticeably higher here in DC (similar to NYC, San Fran, etc) than smaller metropolitan areas. Do you have any suggestions on other cities that have a low house purchase price but high rent ratio? Appreciate the input.

[Anonymous]

Springfield, VA (near Ft. Belvoir). Easy-peasy rentals for military families.

[Anonymous]

Anonymous wrote:Look into rental laws. DC is an awful place for landlords. probably the beach is your best option.

+1 it's hard to evict and very hard to sell rental properties due to tenant's rights in DC.