How are the rents for investors in the Northern Virginia area ?

Question

Hello Everyone!

I am looking to purchase my first investment property in Northern Virginia, my budget is 650k max. Cash flow is non existent for the properties i was looking at, my only option is to either house hack or rent out the whole place and hope to break even. With 20% down on a 650k property, the mortgage is looking to be around $2800 bucks. My question: is it even realistic to rent out a townhome for $3000 in falls church, Arlington area - either walkable or 2-3 miles from metro. I see on Zillow rentals, most of the townhomes around that price have been on there for a month or longer with no applicants. Hoping to know if any of you have been renting your properties at that price. Thanks!

Justin Pierce · Answer

It is really tough.  You might try looking out to Manassas or Woodbridge.  It's still pretty tough to make the deals cash flow.  I live in NoVa but I'm now buying most all of my properties in Richmond and NC because the purchase to rental ratio is much better.  I also don't like this talk increase renter protections.  The Virginia laws as they are now are very fair.  It sounds like they're going to start going the way of Maryland and DC.

You have to look real hard for deals but if you can't make NoVa work then you should look at areas you like to travel to, maybe somewhere you have family.  See if you can make those numbers work better in that market.  Don't buy in a place where you're never going to travel to or hate going.  It's best if the location is within 2-4 hour drive.

Jennifer Hoyer · Answer

I'm a professional property manager in NOVA.  Here's a link to MLS rental prices in the last 60 days in Arlington/Falls Church/Alexandria centers for townhomes/detached w/ 3-4 BR & 2-4BA.  Rental prices went up at least 10% this year. I also ran a sales search for 600-650K homes sold in the past 60 days in corresponding areas to give you an idea of size comparisons.  In my experience, homes with 3-4 BR and 3-4 FullBA are highly desired by young professionals and they will pay more, especially near a metro. Many PM companies are no longer listing on Zillow btw. It's not cost-effective so its data is less accurate.

RENTED (183)

SOLD (15)

Let me know if you need an agent.

Joaquin Camarasa · Answer

@Aditya Tor in our area it is really challenging to make things work. As @Aj Parikh mentioned in areas like Manassas or Woodbridge numbers work a little better for investment properties. However, unless you rent by the room you won’t be able to cover the whole mortgage. This will add a bit of tenant drama when sharing common spaces so something to keep in mind.

Main strategy used in the area is reducing expenses through house hacking and play the appreciation game.

Nabeel Qureshi · Answer

I would recommend looking for a condo or townhome under 400K and living there for a year or two as a primary residence.  You might be able to get it cash flow after renting it out because of better interest rate than investment.

Those rentals are harder to rent, you’re right because the rent is higher and less people in the market for those.  Plus side is you might attract a small family of reliable tenants if your place is nice.  And the appreciation will be better.  3 bed 2-3 bath homes will always be appealing to first time home buyers in future.

Also consider 25% on a lower price property to help cash flow.   Real estate is location location location.  Recommend staying in Arlington, Alexandria, or Falls Church- Woodbridge and Manassas may be too far out.  Think of something close to schools, major hospitals, DC, govt etc.

Gregory Cudzilo · Answer

@Tina Lee Hi Tina! I have 1 rental property in Norfolk, but I am looking for more. I'd love to connect and potentially work with your wholesaler.

Lexie De Stefano · Answer

Hi! I'm a former renter in the area and now current Arlington homeowner. The following are just my own observations/things that I've learned from talking with realtors/investors/families with children in the area. Hopefully the below helps! :)

I personally think this is doable, although as others have pointed out, the cashflow will be pretty low. I've consistently been checking out places for rent/sale over the last couple years, (as both a renter, and now a property owner) and when townhomes under.5 miles from the metro go up for rent in the area, it can even be around the $3800-$4000 mark IF they're nicely renovated. Those with garages go for even more...parking can be brutal when close to the metro. A lot of the homes that I've seen rent at the above price point are usually valued around $850k+.

At the $2800 price point, you probably would be able to make it happen depending on the place and location. For a somewhat updated place without a garage (we're talking 3 bed 2/3 bath) and probably a few miles from the metro, those can rent at that price point. With your budget, you'll probably be limited to South Arlington, where I'd recommend Shirlington/Del Ray as those are cute, trendy areas with lots of young professionals. (Lots of stuff within walking distance, and the Potomac Yard metro will be finished by 2022/2023.) You're less likely to get a family (although it might appeal to a military family because of the Pentagon, Ft. Myer, etc.), because many would prefer to remain in North Arlington (north of the 50) because the schools are perceived as higher rated. You also should check out some townhomes that are technically one side of a duplex (weird I know, but typical for the area), or rowhouses, because those don't have HOA fees. That can definitely help your bottom line, and is something I wish I'd considered!

Alternatively, Falls Church City (which is perceived differently from Falls Church itself) has some townhouses at this price point, that might also rent for what you're looking at. Falls Church itself can be a mixed bag, as you want to pay attention to the neighborhood. Falls Church city is just above 2 square miles and has highly ranked schools, although there are a couple of regular Falls Church neighborhood pockets that feed into the Mclean school districts, which means you may end up appealing to families, if that would be of interest. The housing price points immediately drop a significant amount outside of those school districts- so if you're seeing discrepancies in prices, I'd guess the schools possibly could be a factor.

Phil W. · Answer

hello what is the difference between wholesale properties and buying one out on the open market?

Tina Lee · Answer

Let me know if you are looking for wholesale properties in Norfolk Virginia and surrounding areas.  I have a great wholesaler there.

Phil W. · Answer

Curious if you pulled the trigger.  I"m on of the very few investors in loudoun area 4 houses including my own, and one single family in clarke county VA area. The cash flow wasn't good at first but it's pretty good now but you also get the appreciation.   This area is uniqe with the high concentration of government and tech jobs and still growing fast.  I just do real estate on the side as separate income but to also build wealth.  To really make money you have to be willing to put down 50% and let it age but also have good tenants.  I stopped buying properties in 2013 and have been renting ever since and got into equities since to park money.  Was really boring to be quite honest the last 10 years but in the last 2 years rents have sky rocketed so it's all perked my interest.   Working in an office at a very young age at 19 in the late 90's and earl 2000's experiencing the dotcom bust and then the 2008 financial crisis and mortgage meltdown really scared me away from stock so I parked all my money in real estate at the time.