Investment property - best location?

[Anonymous]

I have inherited some money ($200k) that I was not expecting and want to buy an investment property.

Given the knowledgeable folks on this board, I wanted to see if you could provide input on the best location (DC, MD, VA) to buy a rental property as I'm new to the area. More specifically, where are the locations with the lowest purchase prices but highest rents, which I assume is what I should be looking for.

Looking to keep expenses low so not as interested in condos or townhouses due to the HOA obligations and I will manage the property myself.

Suggestions on where to start looking?

By the way, I'm not ready to engage an agent yet. Just want to educate myself first and get familiarized with neighborhoods, doing Redfin/Zillow research before involving an agent.

[Anonymous]

DC.

[Anonymous]

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

[Anonymous]

If you will be actively managing the place yourself, you should get something nearby. You don't want to go fix plumbing through an hour of traffic.

[Anonymous]

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.

[Anonymous]

I rent a 2 bedroom condo in Laurel, MD (I know you said no condo but unless you do not have a day job, condo is your best friend as many things will be the condo board's problem). There are townhouses and single family homes but they are more than 200K. It is Anne Arundel county side of laurel by the way so lower taxes. Since it is close to Ft. Meade/NSA, you can easily get 1800 and up in rent. I am not a professional (just did not sell my starter home), so hopefully the experts will set me straight if I am wrong (for your sake).

[Anonymous]

DCNW. Condo for $170k,HOA includes alkl utilities and is just under $300, rent $1300, maintenance guys on site fix most things. Work that takes less than 15 minutes is free.

[Anonymous]

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.

[Anonymous]

Buy something near UMD and rent to students.

[Anonymous]

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?

[Anonymous]

Anonymous wrote:I rent a 2 bedroom condo in Laurel, MD (I know you said no condo but unless you do not have a day job, condo is your best friend as many things will be the condo board's problem). There are townhouses and single family homes but they are more than 200K. It is Anne Arundel county side of laurel by the way so lower taxes. Since it is close to Ft. Meade/NSA, you can easily get 1800 and up in rent. I am not a professional (just did not sell my starter home), so hopefully the experts will set me straight if I am wrong (for your sake).

OP here. Thanks for the input. I'm going to do a search in Laurel and see what pops up. This area wasn't even on my radar.

[Anonymous]

Anonymous wrote:DCNW. Condo for $170k,HOA includes alkl utilities and is just under $300, rent $1300, maintenance guys on site fix most things. Work that takes less than 15 minutes is free.

What neighborhood in NW?

[Anonymous]

I would go wherever FBI puts their new headquarters - springfield or PG Co

[Anonymous]

North bethesda / white flint area. That area is going to take off in the next 10 years. Get in now. And get a condo!

[Anonymous]

I would look for something near one of the major military bases, like Belvoir - perhaps a townhouse that would appeal to a family with a couple of kids. My friends who rent to military seem pretty happy. If you find a fee-simple townhouse, it might have a $200/quarter HOA fee that covers sewer, trash, plowing, etc.