Before investing or moving into a new area, it doesn’t hurt to look at rental price trends. After all, if you’re moving to a new city, you’ll want to know what to expect to pay for housing. On the other hand, if you’re looking to invest, it’s important to pay attention to rental price trends so you can set competitive rental rates. So if you’re looking to invest in Washington DC, let’s look at rental price trends and how you can navigate the current market.
Current Rental Price Trends in DC
Before you consider moving to an area, it’s crucial to research several aspects. First, you want to know what kind of area you’re moving to, what type of attractions are near, and how much it costs to live there. One way to find out is by looking at rental price trends. If you’re thinking about moving to Washington DC, here are a few points to consider while looking at rental price trends in the area.
- What’s the Average Rent?
- Neighborhood Rental Price Trends
What’s the Average Rent?
Rent prices differ depending on the unit type and how many bedrooms it has. That said, here are some of the average rates in Washington DC.
- Studio Apartment- $1,949/month
- One Bedroom- $2,400/month
- Two Bedrooms- $3,274/month
- Three Bedrooms- $3,375/month
Neighborhood Rental Price Trends
Another factor that both renters and rental owners should look at is neighborhood rental price trends. Prices differ depending on which neighborhood you’re located in. Here are some of the top areas in Washington DC and their average rental rates.
- Foggy Bottoms
- Adams Morgan
- Dupont Circle
- Logan Circle
This DC neighborhood is known for being the home of Georgetown University, a well-known college in the area. Additionally, you can find a lot of history in Georgetown, as it was the site of many historical events. There are many things for residents to do in Georgetown, like shopping, sightseeing, and exploring. If you’re wondering what it’s like to live in Georgetown, here are the average rent prices.
- Studio- $1,575
- One Bedroom- $2,800
- Two Bedroom- $3,850
- Three Bedroom- $3,995
Another popular town among residents and tourists is Foggy Bottoms. This DC town is safe, bright, and vibrant, with its own culture. Here you can find JFK Center for Performing Arts, which is DC’s premier arts location, with extraordinary performances all year round. That said, Foggy Bottoms is a great place to live for those who like art, restaurants, and outdoor activities. Here are the average rental rates if you’re thinking of living here.
- Studio (West End)- $2,561
- One Bedroom (West End)- $3,182
- Two Bedroom (West End)- $5,631
- Three Bedroom- $4,200
Like most DC neighborhoods, Adams Morgan is filled with a rich history. As you go down the streets, you’ll even notice 19th-century row houses lining the block. In addition, Adams Morgan has tons of exciting events and activities to do throughout the year. For instance, many residents and tourists go to the community garden, attend the Annual Adams Morgan Day Festival, and visit several parks in the neighborhood. If you’re wondering how much you’ll spend on housing in Adams Morgan, here are some of the average rental rates.
- Studio- $1,807
- One Bedroom- $2,398
- Two Bedroom- $3,070
- Three Bedroom- $4,209
Another town known for its rich history is Dupont Circle. This town is known for its post-Civil War era buildings and Dupont Circle, where the town got its name. If you’re looking to live in this tourist town, several row houses are in the neighborhood. That said, here are some of the average rental rates in Dupont Circle.
- Studio- $2,321
- One Bedroom- $2,868
- Two Bedroom- $5,220
- Three Bedroom- $4,100
This busy town is mainly known as the entertainment hub of Washington DC. The Capital One Area, where the Washington Wizards, Mystics, and Capitals play, makes this one of the most popular areas in DC. Aside from sporting events, there are several art museums and galleries to explore. The average rental rates are listed below if you’re wondering how much it would cost to live here.
- Studio- $2,044
- One Bedroom- $2,722
- Two Bedroom- $3,339
- Three Bedroom- $4,567
Like Dupont Circle, Logan Circle is one of DC’s most significant neighborhood roundabouts. Logan Circle is a booming downtown neighborhood with a residential district. This popular neighborhood is home to several legislators, lobbyists, and young business professionals. Additionally, compared to other DC neighborhoods, Logan Circle is reasonably affordable. Below are the average rental rates in Logan Circle.
- Studio- $1,800
- One Bedroom- $2,619
- Two Bedroom- $3,739
- Three Bedroom- $3,300
What Drives Rental Prices?
Rental prices are dependent on several factors, like supply and demand, location, property value, and more. In addition, landlords typically set competitive rates according to other property prices in the area. Therefore, it’s crucial for landlords, Washington DC property management companies, and tenants to know what drives rental price trends to make decisions accordingly. Here are some of the determining factors in setting rent prices.
- Supply and Demand
- Neighborhood Location
- Value of the Property
- Property Amenities
- Seasonal Leasing Opportunities
Supply and Demand
One of the most significant determining factors of rent prices is supply and demand. Currently, we’re experiencing periods of high demand, low supply, and high inflation. As such, rental prices are pretty high across the United States. However, landlords can use the rental market demand to set competitive prices, and tenants can look for areas with less demand and more housing options.
Location is another significant factor when it comes to rental rates. Rentals near desirable locations like entertainment centers, shopping malls, gyms, restaurants, and local attractions tend to be more pricey. Many of these desirable properties attract a vast pool of tenants, making them highly competitive. As such, landlords can set prices accordingly.
Value of the Property
Of course, the property’s overall value plays a role in how much a landlord charges for rent. Typically, owners base rent prices on a percentage of the home’s current market value. Therefore, the more a property is worth, the more a landlord can charge for rent. Luckily, like Zillow’s Home Estimator, there are resources to help landlords quickly determine how much their home is worth.
Many renters look for properties with updated appliances, modern home upgrades, air conditioning, parking, and washer/dryer access. These are all amenities that can play a role in how much a landlord charges for rent. However, if your rental doesn’t have many of these amenities, it doesn’t hurt to consider investing in some upgrades. After all, you can draw in a wider pool of tenants and set more competitive rental rates.
Seasonal Leasing Opportunities
Seasonal leasing can impact the market more than you may think. It relates to supply and demand and which seasons are more popular for new leasing opportunities. That said, summer tends to be a time when rentals are high in demand, so landlords have the opportunity to raise rent prices to compete with other properties. However, it’s crucial to stay reasonable, so you don’t drive potential renters away from the competition.
What Can Tenants Get For Their Money?
With high rent prices in most cities across the United States, it can be difficult for renters to find reasonable housing. So, what can tenants get for their money in Washington DC? First, we’ve gone over some of the average rent prices for studios, one bedroom, two bedrooms, and three bedrooms in the top neighborhoods. Now, let’s separate pricey housing from less expensive options.
Most Expensive DC Neighborhoods
Some of the most expensive neighborhoods to live in Washington DC are Near Northeast, West End, Dupont Circle, and U-Street. The average prices for a one-bedroom apartment in these neighborhoods are around $3,184. That said, if you’re looking for a rental in a popular DC area with a large budget, these neighborhoods may be worth checking out.
Least Expensive DC Neighborhoods
On the other hand, if you’re looking for a more affordable rental home in Washington DC, some less expensive neighborhoods are to explore. Some options include Bellevue, Congress Heights, Fort Dupont, and Anacostia. The average rental rate for a one-bedroom apartment in these neighborhoods is around $1,1146, making it a much more affordable location.
What Can Landlords Charge and Still Limit Vacancy Time?
With such a competitive rental market, landlords have an advantage–they can charge competitive rates. However, don’t raise rates so high that they drive renters away. Unfortunately, if rates are too high, landlords can experience vacancy periods, which can be a nightmare for landlords. After all, if nobody is living in your rental, you’re not generating monthly income from that property.
Washington DC landlords should consider the average rental rates while setting rates for their properties. One good strategy is to set rates close to or a bit lower than the average rate so you don’t have to search to find tenants. Instead, setting competitive yet reasonable rates can attract tenants in any location. Additionally, consider the value of your property and what amenities you offer. Tenants often will pay more for more amenities and upgraded rental properties.
Overall, when determining rental rates, consider the supply and demand, location, amenities, local attractions, job opportunities, and more. On the other hand, be cautious and don’t set rates significantly higher than local competitors.
How Can Property Management Help?
Researching rental price trends, setting fair prices, finding tenants, and managing several properties can be a lot of work for landlords. Luckily, all the tasks don’t have to fall in the hands of a landlord if you have a top-notch rental property management team on your side.
Bay Property Management Group is a full-service management team that maximizes landlords’ rental portfolios. We can handle all tasks, big or small. Contact us today if you need rental management services in Baltimore, Philadelphia, Northern Virginia, or Washington DC.