Having experienced (or being cognitive of) my first real estate bubble during the last five years, and being so priced out to the properties I would have truly liked to invest in (inner DC: SE, SW NE, NW etc…) I stopped reading these forums and decided to wait until, when I determined, a drop in prices would begin. It seems this is now really starting, and overinflated inspection and asking prices are declining.
I’m 26, grew up right in a townhouse on Capitol Hill, in what was once a modest, if not a dangerous neighborhood. The neighborhood has now completly gentrified and my chances of finding townhomes that are affordable and rent worthy still seem out of reach. I am looking to buy and rent properties, but have come to the conclusion that I’ll still need to look further out and am wondering if anyone else here is looking to exurbs (Arlington, Fairfax, Rockville etc…still expensive) or places an hour away in VA and Maryland and have found properties or neighborhoods that can actually produce a decent cashflow and are moderately priced.
I keep hearing from the housing bulls who say prices cannot drop and that inner DC is immune. It may now actually be the case, but who knows 5 years from now. So basically I am just wondering about areas (Warrenton, Front Royal, Odenton etc…) that may still hold some good bargains, or where a large number of foreclosures are happening to find some deals.
Keith, in the past your advice has proved valuable. I’m sure you are still of the mind that properties are way overpriced and looking farther out in VA is a more prudent way to invest. My family owns a farm in Rappahanock, that area saw a huge rise in prices, do you have any opinions on Luray or Lynchburg? Also, what would be the best real estate group to join in this area? Thanks
First, I don’t believe any area is “immune” to price drops…
The problem with all areas of Virginia is that the rise in sales prices has outstripped the rise in rental prices. But I think, as more and more howeowners get in trouble with their lenders (e.g., foreclosures, etc.), these folks will still need to live somewhere and that may well drive up rental demand and prices…
Lynchburg obviously has its own economy totally independant of the DC area and is not within commuting range. Luray is on the outter fringe of the DC commute (I know several folks that commuted in from WV!)…
The prices anywhere within commute of DC are obscene!
I’ve been running into the same problem around here (NoVA Area). The amount of money to put down in order to make it a viable rental just isn’t worth it. I’m still new and looking to break into the REI scene. I may end up purchasing in another state!
I moved from DC also…dial in your radio to WJFK-FM at 106.7 in the afternoon and listen to “Don and Mike”…
A caller called in one day and said that he lived too far out to get their show. Their answer was very simple, “Move closer to the food, sir”…that goes for you, too. If you really, really want to be an investor and your market doesn’t support that, move closer to the food.
Here’s a link to several clubs around the D.C. area
Here is a link to the club I checked out once before leaving on a very, very long vacation
It’s free, has quite a large following and you may be able to at least run into some people who can give you some better information. It’s a start and better yet it’s free!
ha-ha-ha, I have to admit I’m from Lynchburg. I invest in a number of placed in non-NoVA places in VA (currently live in the country of Mexi-fornia).
My word of caution is when looking in the hitherlands of VA some markets have gone up (like Charlottesville, rentals are ridiculiosuly priced) and other have moved very, very slow (like Southside, Danville). It really depends on what is (or not) driving the economy. Are their deals to had, sure, but you really need to understand the local niche economics. You can buy house in Lynchburg for $30k and rent hem out for a couple hundred a month, but don’t expect to make much (if any) appreciation on a long term hold. Probably good, if you live local, do your own work and manage, but not suitable (IMHO) for out-town/use prop. mgmt ownership.
I appreciate the advice. I’d looked at some of the southern Virginia areas myself, though the distance is a consideration. I guess for now, I’ll continue to monitor the local conditions. Moving to another state to invest is to great a change right now. I think area’s behind Union Station are changing, so I’ll be looking there as well.