Maryland is full of quaint towns, bustling cities, and the suburban countryside that attract renters to everything the Old Line State has to offer. The growing trend towards single-family homes provides investors a great opportunity to take advantage of low-interest rates and high demand. So, join us below as we track down the state’s best places to invest in real estate heading into 2021.
Maryland’s 7 Best Places to Invest in Real Estate
The first rule of real estate is location, location, location, and indeed that is vital. However, rental property investors look at slightly different criteria than a traditional owner-occupied home. That said, a successful rental needs access to amenities, proximity to transportation (if in a city), and be competitively priced to move. For landlords, determining potential rent is essential to figure out what deals are worth it and which ones to walk away from. To help get you started, let’s look at some of the best places to invest in real estate throughout Maryland below.
- District Heights
Neighborhood Scout reports that more than half of all Baltimore residents rent their homes. Translating that to more than 300,000 tenants in 2020 alone means that Baltimore has an opportunity for investors. That said, Baltimore is very competitive, especially in certain areas. Check out these top neighborhoods to consider for your rental property investment below.
The Best Neighborhoods in Baltimore
- Federal Hill – Historic brick row houses attract everyone from students to young families. Federal Hill offers one-of-a-kind markets, large outdoor parks, proximity to sporting arenas, and tons of restaurants all within walking distance to the Inner Harbor.
- Harbor East – Baltimore’s upscale destination on the waterfront is right in the middle of the action. Besides shopping and restaurants, Harbor East puts residents only steps away from the Inner Harbor, National Aquarium, Maryland Science Center, and several cultural museums. Best of all, it sits next to Baltimore’s famed Little Italy!
- Canton – The resurgence of Canton has seen a diversified group of people flocking to its luxurious waterfront homes and convenient apartments over the past decade. Canton Square is famous for its bars and restaurants serving up some of the city’s finest eats.
- Hampden – Hampden perfectly epitomizes the Baltimore experience. Whether it’s shopping “The Avenue,” taking in the Christmas light extravaganza on 34th St, or checking out filming locations from John Waters’ films ‘Cry-Baby’ and ‘Hairspray,’ Hampden offers an experience you cannot get anywhere else.
- Charles Village – The instantly recognizable “painted lady” houses that line the streets of Charles Village attracts an eclectic group of residents. However, high rise and industrial lofts are also a popular option for residents of this boho meets urban neighborhood. Also, it sits just minutes from Johns Hopkins University and the Baltimore Museum of Art.
- Mt Washington – For those looking for a quiet place to escape the bustle of the city, Mt Washington is just such a place. Offering a mix of terrace apartments, single-family cottages, and towering historic Victorians, Mt Washington enjoys its laid-back reputation. Take time to enjoy the quaint shops, antique stores, and local restaurants that dot the narrow streets.
Towson offers residents an eclectic mix of urban amenities with a suburban feel, Tagged as one of Baltimore County’s top places to live. Many residents do own their own homes, and the average income is higher than nearby Baltimore City. That said, Towson draws many young professionals and students to the area who need housing. Investors can capitalize on Towson’s lifestyle with its many unique restaurants, organic grocery stores, gyms, entertainment, and endless shopping opportunities. Also, as a bonus, public schools are highly rated in the area.
Offering top-rated public schools, diverse housing options, and ample entertainment, Columbia has something for everyone. This is an area where more than 60% of residents own a home, and the median income is high compared to other areas on our list. That said, do not be deterred as this location still needs rental properties. Just keep in mind you may need to spend more for a desirable single-family home to see a healthy return on investment.
Germantown’s proximity to the nation’s capital appeals to a diverse group of potential renters. As median rental rates hover between $1600 and $1700 per month, investors should take note that rates are steadily rising year over year. Additionally, the public schools here are top-notch, and it provides individuals easy access to tons of restaurants, amenities, and cultural attractions.
Also, a bit on the pricier side, Rockville is another popular choice for DC commuters. That said, over 40% of residents rent their homes for a median rental rate of around $1800.
Additionally, Rockville was named one of Maryland’s Top 10 Places to Live thanks to booming nightlife, great schools, healthy employment rates, and continued job growth. That said, purchase prices are high, and investors will need to be extra vigilant in researching the local market to determine rentability.
Just a quick metro ride from Washington DC is Hyattsville. It’s beautiful historic architecture, local restaurants, and proximity to several colleges makes it a desirable spot for young professionals, students, and families. Additionally, rents here are steep but so is the competition. The high demand means there are plenty of prospects to go around if the unit is priced right. Amenities in this area are essential, so do your research, and you, too, could be cashing in.
District Heights boasts more affordable average rent than the nearby boroughs of Washington DC. Although small in population, this area has enjoyed positive job growth and modest but steady home appreciation values. Public transit abounds, giving residents easy access to nearby attractions, towns, employment, and nightlife. Investors will appreciate that, on average, rental properties receive upwards of 100 leads and remain on the market well under 30 days.
How to Find a Successful Rental Property Investment
As an investor, searching for an investment property can seem daunting. However, some criteria can translate to any neighborhood and help you determine the best option for your portfolio. Check out our tips below for how to find the best places to invest in real estate.
- Find the Ideal Neighborhood
- Real Estate Market Outlook
- Property Condition
- Property Features and Amenities
- Localized Economic Trends
- Local Regulations and Property Taxes
Find the Ideal Neighborhood
Step one is to evaluate the neighborhood thoroughly. The area statistics determine what the property is worth and the rental amount you can expect. Ask yourself the following questions:
- What is your overall impression of the neighborhood?
- How are current crime statistics? What types of crimes are occurring?
- Is the area walkable?
- Are there any local attractions or cultural activities nearby?
- Is there easy access to either public transit or commuter highways?
- What shopping centers, parks, or recreational areas are nearby?
Real Estate Market Outlook
Successful investments balance competitive pricing with the amenities renters have come to expect in that area. Review the local competition carefully by checking both recently rented units and ones still on the market. Thus, this will give you an idea of how much rent you can comfortably expect based on similar area comps.
A fixer-upper could provide great financial returns for experienced investors. That said, a fixer-upper is not where new investors want to start unless you have extensive construction experience and capital to cover costs while the property sits empty. So, stick to properties in your comfort level that perhaps need some minor cosmetic upgrades instead of a full overhaul.
Property Features and Amenities
Amenities both inside and outside the home, contribute to a tenant’s decision to rent or not rent your property. Keep in mind; different areas will draw different pools of tenants, and landlords must recognize and cater to these needs to set their property apart. Also, amenities such as private parking, in-unit washer/dryer, or office space are widely desired and even expected in many areas. Therefore, the more features and amenities a property has that match the demand, the higher the potential rent.
Localized Economic Trends
An area’s potential growth is a critical factor for long term investments. A steady stream of neighborhood growth provides better employment opportunities and, in turn, a healthy median income. So, ask yourself some of the following questions:
- Is there any new development?
- Does the community have any revitalization projects planned?
- How is the public transit access in the area?
- Are any new companies moving to the surrounding area?
- Is the current job market strong and expected to grow?
Local Regulations and Property Taxes
Nowadays, states, counties, and local jurisdictions all have something to say regarding rental properties. Therefore, due diligence is essential to ensuring proper compliance and avoiding costly fines. Additionally, property taxes can vary greatly from one location to another. These taxes factor into your year-end bottom line. So, try and seek out an area with a lower property tax rate to keep more profits in your pocket.
Maryland has a lot to offer both renters and investors for those that know where to look. Are you wondering whether 2021 is the time to invest? Check out our blog for more information on upcoming rental housing trends and tips for the best places to invest in real estate as we head into the new year. Once you have purchased your investment property, turn to the trusted rental management experts at Bay Property Management Group. Our dedicated team of leasing professionals, property managers, and support staff handle all aspects of the marketing, leasing, and maintenance process for you – which frees up your time to chase the next big deal! Give us a call today to learn more.