Househacking / Investing in Federal Hill, Baltimore

[Andrew Nugent]

Hello BP!

Are there any investors out there who have experience working in the rental market in Fed Hill? What's your take on status of the market and what are some of the rental rates you are charging if you feel comfortable sharing.

I'm thinking of investing there in the future.

[Andy Gross]

@Andrew Nugent It's a hot neighborhood for the 21-35 crowd, but the prices might make it tough to make a profit. I found that the floor for Federal Hill was about $650 per bedroom near Riverside Park or near the southern end of Federal Hill proper. If the place was nicer or closer to Cross Street, you might be $1000 or more per bedroom. Parking of course always commanded a premium. My numbers are a bit old, but from my limited experience, it looks hard to break 4-5% cap rates in the area. I think the Charles Street Corridor north of the Harbor is a better bet.

If you are looking to househack, however, Federal Hill might be perfect. Lots of 20 somethings looking for rooms to rent. The trick is finding someone who is at your level as far as partying goes. Fed Hill has a ton of reasons to stay out until 2am. If you are a light sleeper, early riser, or teetotaler, you might want to screen carefully.