Anything I should be aware of buying homes in Baltimore City?

Question

Hi BP!I am new at rental real estate and had my eye on buying property in Baltimore city. Because I am new I am VERY nervous about buying homes. Is there anything I should be wary of and watch out for? I don’t know, what I don’t know.. so I am trying to find out what that might be. So far, I know I should be wary of the neighborhoods I am looking to buy. I am focusing on Fed Hill and Fells Point. Should I look out for townhomes that have a specific number of bedrooms and bathrooms? What property management company do you guys use? What are all the expenses that come with renting Baltimore homes (other then house maintenance fees like painting walls, broken HVAC etc.). Are there city fees that I should look out for? Anything else I should know? Should I even invest in Baltimore city or should I invest in other places like Ellicott City or Columbia?

Joe Norman · Answer

I wouldn't say that "now isn't the time to buy", just that there are fewer good deals out there then there are at other times. Be cautions and make sure you're actually getting a deal that will cashflow and/or appreciation (whatever you're looking for). As a first timer I would also try to make sure its something you can sell fairly easily (i.e., make sure its in an area with robust retail sales) in case you discover that REI isn't for you.

Matthew Paul · Answer

@Jessica Mariano Invest close to where you live . I am in AA county and all of my properties are here . I would live in any of my properties  ( lived in 3 of them ) . I have no desire to deal with Balto , its government , taxes , crime rate , etc . You will get better appreciation in the counties .

Now is not the time to buy , unless you find an off market deal being sold by someone who hasnt heard the market is smoking hot .

Robert Carter · Answer

@Jessica Mariano really for me it was does he/she know what they are talking about? Do they know the area? Reason why they don’t touch certain areas. How do they like to communicate? Are they investors themselves? All in all you want to get a good feel for the property manager because if it works out you’ll be working with each other for years to come.

Matthew Paul · Answer

AA county is great , I NEVER have a problem finding a good tenant . All are in Pasadena . My last 2 turnovers took me 1/2 a day to get the house ready . I had 1 old man who was filthy and when he left I had about $1500 worth of repairs , painting and cleaning , but he was there 10 years and always paid the house was due for most of it . ( he died) . Sounds like your mother doesnt screen too well . I get VERY good cash flow , and great appreciation . Lower taxes too .  But like I said  , deals are few , I go all in cash to get them and then refinance after the fact . Being able to settle in 10 days without aprasials and other inspections speeds up the process

Ozzy Sirimsi · Answer

I would say, dont over pay just to buy a rental.

Fells Point and Fed Hill are good areas but they are generally over priced anyway.

Buy a deal not a house unless your game plan is to buy them to park your money in a specific area.

Joseph Vu · Answer

If that is your criteria, there are also places you can take a look at. Especially in the mid-west, where it is also inexpensive and cash flow is decent.

For instance, a SFH in Indianapolis is about 150k and rents out for about 1100 or even a SFH in OKC that sells for 130k and rents for 1000. I just want to show you that you have other options.

I wouldn't ideally look into townhomes as they come with HOA restrictions. Which is another can of worms I'd rather not deal with.

Jessica Mariano · Answer

@Joseph Vu I chose Baltimore because I was thinking there would be a higher pool of tenants. The houses are also less expensive.  In the city it’s around 270K-320K for a townhouse whereas in the counties it’s starting at $400K

Jessica Mariano · Answer

@Joe Norman thanks for the advice! I also see you’re a realtor which I am in search of one so I can find a good rental home. Would you be interested in connecting?

Jessica Mariano · Answer

@Matthew Paul that’s interesting… I live in AA County and my mother in law has a few rental townhouses here too and she said she isn’t making profit off of them because the expenses are so high after the tenant moves out (replacing flooring, painting etc.). She said with one townhouse she had to pay $7500. I can’t tell if she is doing something wrong to not make profit. I was also worried that there wouldn’t be enough of a tenant pool in the counties compared to the city. My thought process was that there are a lot of students (grad, med, law etc.) that would be looking to rent so I thought it would be easier for me to find a tenant. Do you have trouble finding responsible tenants in AA county?

Jessica Mariano · Answer

@Robert Carter thanks so much for your advice! I had a property manager in mind based on reviews but I’ve never actually interviewed them. I’ll get started on doing that! We’re there any key qualities you were looking out for during the interviews?

@Drew Sygit will make sure to read that! Thanks for your post!

Anything I should be aware of buying homes in Baltimore City?

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