Loudoun County - Sterling, Virginia - Sell or Hold?

Question

We have a townhouse rental in Sterling, Virginia.  Was just curious what your thoughts are about the Northern Virginia (specifically Loudoun County) Real Estate Market. More specifically,

• Do you think there's still room for further appreciation in the next 3-5 years?
• If you own in this area, are planning to keep your property/properties?
• What are the reasons behind this?

I have already consulted a few real estate agents in the area; many of which advise that it's still a hot market and now is a good time to sell.

Thanks in advance!

Chris Mills · Answer

Hi @Gilda VanderHeyden,

As you know, Sterling varies widely neighborhood to neighborhood. Generally speaking, I like the area for appreciation. That said, the deal has to be a good deal for you. I personally would not hold onto a negative cashflow deal with hopes of appreciation (ideally I would not enter one). This coming circus of an election is also a major consideration for investors. It's really case by case, but the area is resilient compared to a lot of other parts of the country.

Adrienne Green · Answer

Hi @Gilda VanderHeyden!  Yes, it's a hot market and things are selling quickly. But what is the underlying cause? It's because housing demand is vastly outnumbering supply in Northern Virginia due to our growing population. That is projected to continue for a very long time.

I think the question is what is the better investment: the house you own, or selling and taking the proceeds and putting them in another investment? That could be another real estate investment, the stock market, etc.

Personally, I have 5 investment properties in Northern Virginia, and I'm not selling them right now. They are cash flowing, and I believe the market will continue to appreciate.

Ika Sargeant · Answer

@Gilda VanderHeyden that is the burning question. I think @Adrienne Green makes a good point. Demand is still very strong. Lots of people who were locked out of the real estate market because of poor credit and other issues are back trying to get a home become the rates are so low. As for appreciation, that is a big IF??? The question to ask is, if the prices continue to go up, do buyer have the buying power. This is a question for economist to see if the rising home prices are been matched by rising income.

Shelley Moore · Answer

@Gilda VanderHeyden. Wow! Here I am living in Fairfax County asking the same questions. What did you find out?

Tchaka Owen · Answer

@Gilda VanderHeyden - lots of good advice already above. Note: yes, most agents will say it's a good time to sell. A good agent will ask what your real estate goals. Based on what you wrote above, if you're thinking of selling in 3-5 years and are price conscious, there's no harm in selling now because there's no crystal ball. As far as long term appreciation, it is my opinion that the place will appreciate for as long as Washington, DC is a world capital. That's why I held on to my TH in Reston when I moved to Florida 16 years ago. Sterling had just given away it's "edge of the suburbs" status to Ashburn, which in turn was separated from Leesburg by tons of trees and undeveloped land. See the change today?

What's missing from your post is cashflow. How are you doing there? If you're bleeding money each month praying for appreciation, then sell now. On the other hand if rents are covering (or close), you have more options. Good luck!

John Munayer · Answer

Hey @Gilda VanderHeyden

I agree with @Chris Mills on not holding on to negative cash flow if that's the case and hoping for appreciation.  Right now, the market is so hot with low inventory, and properties in Sterling don't last long.  I would sell if I were you unless you are getting great cash flow, then you can wait and see what happens with the market.

Charan K. · Answer

@Gilda VanderHeyden I am in the same boat !!

Muoki Musau · Answer

I'm a realtor and have my opinions on selling:

- Depending on the condition, TH is Ashburn, Sterling, Leesburg are like blue magic so you can cash out nicely. Some forecasts say there will be a downturn in 2021, but who knows. Inventory in Loudoun (and NOVA in general) is hovering around one month, and new construction starts are still way behind demand.

- The reality is that it is way harder to get loans now so you won't see McD's chefs qualifying for $1M loans. Lender requirements are stiff and got stiffer with the low-interest rates.

*takes realtor hat off* Gary Keller says, "The difference between a smart investor and an inexperienced one is whoever holds it the longest."

- Where in Sterling is your TH? Depending on subdivision, you can find more qualified renters all year long. Most people paying $2000-3000 for rent are picky

- Loudoun saw a 2.8% population increase in 2019/2020 so there are people moving here. The bigger questions are 1) what is the proportion buying/renting, and 2) what are their motivation(s) for being in your part of Loudoun? If you can satisfy those two big-picture questions, and prepare your property adequately, and have the appropriate reserves to weather vacancies and/or any economic dark horses, you'll be just fine in 3, 5, 10, 20 years.

-

Shelley Moore · Answer

@Adrienne Green. What about selling my Reston home to purchase a new build in Gainesville, Va?

David Langer · Answer

I had a TH in Ashburn. Just sold recently. Since I had a 15 year mortgage on it, I had a decent equity built in it which I could 1031 into 5 other newer SF properties in a different market. I am getting 5 times more cashflow. I am sure NoVa will appreciate further. Either way, you will be fine. But I prefer cashflow now.

Loudoun County - Sterling, Virginia - Sell or Hold?

Most Popular Reply