Investment property in DC

[Anonymous]

I know this could be considered real estate but I think it's more financial. Does anyone have an investment property in DC area? I'm thinking of buying one and renting it but not sure where to look. Capital Hill area was my first instinct. We would like to keep it and give it to our kids eventually.

[Anonymous]

I don't, but I have looked into it and decided against it. DC investment properties generally don't work on cash flow (prices are too high to get decent return on cash flow). They work on appreciation, which is a speculative play. Granted, appreciation has been high enough over the last couple decades that owning investment properties would have been great. It might continue that way, and it might not.

If I were to do it, I would not pick an area like Capitol Hill that is already gentrified and high prices. I would pick lower cost areas near metro stations and hope for good development. Eckington over Capitol Hill. Potomac Avenue. Anacostia.

[Anonymous]

I wouldn't do DC. It's EXTREMELY tenant friendly. I have friends with investment properties in some lower cost areas and it's nothing but constant headaches. e.g. They want to sell, but first have to offer the property to their tenants who have trashed the place and never paid on time. Ridiculous.

[Anonymous]

We have two investment properties that we purchased in NE - Eckington. We bought during the 2009/2010 dip so we got in really low (think $200K for a rowhouse). It's been great and we've made tons on both rental income and appreciation based on our purchase price. I think Cap hill is likely too expensive to buy anything that will make since from a rental return perspective. Plus most of the appreciation has probably already been factored into the purchase price of the house. If you aren't willing to go east of the river, then I'd consider trying to find a home in Brookland and the surrounding area. It's not going to be cheap either but if you can find something that you can put a little bit of swear equity into and rent to a family for x numebr of years that'd be the way to go. An alternative is to buy a 3-4 bedroom and rent to section 8 while the property appreciates. Section 8 will pay about $4800 for a 4-bedroom which should cover your mortgage.

[Anonymous]

I would only do it if
- you are handy
- your mortgage will be covered by the rent + repairs
- you are ok with tenants requesting the most minor repairs

[Anonymous]

Anonymous wrote:I don't, but I have looked into it and decided against it. DC investment properties generally don't work on cash flow (prices are too high to get decent return on cash flow). They work on appreciation, which is a speculative play. Granted, appreciation has been high enough over the last couple decades that owning investment properties would have been great. It might continue that way, and it might not.

If I were to do it, I would not pick an area like Capitol Hill that is already gentrified and high prices. I would pick lower cost areas near metro stations and hope for good development. Eckington over Capitol Hill. Potomac Avenue. Anacostia.

yes, this.

[Anonymous]

Anonymous wrote:I don't, but I have looked into it and decided against it. DC investment properties generally don't work on cash flow (prices are too high to get decent return on cash flow). They work on appreciation, which is a speculative play. Granted, appreciation has been high enough over the last couple decades that owning investment properties would have been great. It might continue that way, and it might not.

If I were to do it, I would not pick an area like Capitol Hill that is already gentrified and high prices. I would pick lower cost areas near metro stations and hope for good development. Eckington over Capitol Hill. Potomac Avenue. Anacostia.

+1 I was halfheartedly looking into this and coming up with no good ideas. But my FIL has a few in SE that he has told my DH we will get when he's gone -- he got in in the late 80s or early 90s so we'll just benefit from his smart maneuvering.

[Anonymous]

Anonymous wrote:I wouldn't do DC. It's EXTREMELY tenant friendly. I have friends with investment properties in some lower cost areas and it's nothing but constant headaches. e.g. They want to sell, but first have to offer the property to their tenants who have trashed the place and never paid on time. Ridiculous.

This is not true anymore. Please update your knowledge of DC TOPA laws and top spreading misinformation.

[Anonymous]

Anonymous wrote:

Anonymous wrote:I wouldn't do DC. It's EXTREMELY tenant friendly. I have friends with investment properties in some lower cost areas and it's nothing but constant headaches. e.g. They want to sell, but first have to offer the property to their tenants who have trashed the place and never paid on time. Ridiculous.

This is not true anymore. Please update your knowledge of DC TOPA laws and top spreading misinformation.

And instead of providing information, you choose to make an additional incorrect statement. Old TOPA still applies to many situations.

[Anonymous]

Even setting aside TOPA, DC is an extraordinarily tenant-friendly jurisdiction. Among other things, it is virtually impossible to end the tenancy of someone who continues to pay you money, whether or not they have a signed lease agreement. As a tenant, I benefitted from this, but I think my landlord was surprised to learn it.

OP: know what you are getting into.

[Anonymous]

I've had many rental properties in DC and find that as long as you get good tenants there won't be any issues. Don't be a crappy landlord either. Buy something newer that won't require a ton of maintenance and you'll be okay.

[Anonymous]

Is it worth buying a condo or stick with single family homes?