Is it good idea investing in rentals in DC-Maryland area? I'm new

[Renee Z.]

Dear All,

I'm wondering if it is a good choice investing in rental properties in DC-Maryland areas to be specific, Silver Spring, Wheaton and Glenmont.

As you can tell from my profile, I live in this area. And I'm super new to real estate. Just trying to learn as much as I can and make sense of what I'm trying to learn. But I found that it is extremely hard to find multi-family units in Montgomery county, MD. Only a couple in Takoma Park where it is rent controlled and the numbers don't really seem to make any sense.

So I kinda gave up the multi-family house hacking route and am more focused on single family homes in my search now. The housing price in Silver Spring-Wheaton, even Glenmont area is kind of ridiculous. The rent to price ratio is pretty low. So I feel like it is hard (for me) to find a single family home on the market to generate the kind of positive cash flow that will make a good investment. And we also have seasoned investors, house flippers and all cash buyers as competitors. I feel like anything good would be swooped up even before we can have a glimpse.

Seems like the only way to be safe is to find a motivated seller or some thing off market, or buy something way below market value, if significant positive cash flow is what I'm after with each property.

That's why I'm wondering what is every one else investing in in this area? I know you can find good deals in any market as long as you are willing to put in the work. But I'm still wondering, for people new like me, who don't have any experience and are just trying to save for our first single family home, is it just not a good idea to try in this market?

Like I said, I'm only trying to learn. I really appreciate any advice or suggestions.

Thanks a ton!

A little about me and my plan, if it helps you understand my position and my question better in any way. My husband and I are trying to save up for our first single family home. We currently live in a 1 bedroom condo we own, our monthly payment is $1300 which is a little cheaper than renting a 1 bedroom in this area. We are saving 45%-50% of our income per month, which is around $2000 or a little more. Our plan is to find something off market to buy below market value so we can live there while fixing it up, hoping we can generate some equity that way. We are living in there for the possibility to put a lower down payment as primary residence, such as 5% down. Buying off market or below market value will also, hopefully keep our monthly housing payment low which might be easier to generate positive cash flow once we rent the whole house out. And once we are ready, meaning have enough savings, we can rent this one out and move on to the next one the same way.

[Russell Brazil]

Most of my rentals are in the areas you mentioned. Sure you might not get the kind of cash flow that a cheaper property will get, but your property value will go up $10-30k per year during growing economic times and have limited downside during recessions.