NORTHERN VIRGINIA and WASHINGTON DC | Great Place to Buy an Investment Property?
Should you buy a rental property in the DC area?
Buying a rental property can be a great way to get passive income and grow your net-worth , but it requires a commitment of time and cash. After choosing the proper property, prepping the unit, and finding dependable tenants, ongoing maintenance is required.
In my latest Youtube Live I talk with, Dan Lane, who is heavily involved in the rental business in Northern Virginia, will share with us all the dos and don’ts when planning to invest in rentals in the area.
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Typical expenses when owning a rental
There are three categories of expenses:
Basic repairs-these are like leaky faucets or broken toilets, which happen day-to-day and do not need too much money to repair.
CAPEX- These are large repairs like a roof or an HVAC system. These aren't going to come up every day, but say over 20 years
Vacancy: You're going to have times when you're in-between tenants, you're not getting any rent, but you still have to make the mortgage payment and pay utilities. The house is still costing you money, but you don't have any money coming in. so it’s a good strategy just to put some money aside every month so when stuff comes up, it's not a big deal.
The best type of properties to rent out
You can make money with just about any type of property. Dan likes buying single families because tenants tend to stay for a long time, and turnover is a big expense. If a tenant moves out, you may have to paint, you're going t have some vacancy, and it will cost money when a tenant moves out. So if you can get someone to stay for a long time, it will be much more profitable. The problem with bigger houses is they're bigger, so if you have to paint or if you have to redo the flooring, you're just dealing with more square footage, and so it's going to cost you more.
Notable Quotes
We're all buying rental properties to make money, but it's just how you're going to make money in the cash flow market that matters.
If you're looking for cash flow in Northern Virginia, Airbnb is a good way to do it because you can make the numbers work. The trade-off is that it's a little bit more hands-on.
I'm a big believer in Northern Virginia real estate, and there's never been a time when prices have gone down over 10 years. Our market is so stable here with the government and so many jobs.
Real estate has decreased in Northern Virginia, but it's always recovered. I don't have a crystal ball to guarantee that, but I believe that if you can hold long-term, you will be very happy.
A good strategy is just to put some money aside every month. Whether you have expenses or not, put some money aside so that it's not a big deal when stuff comes up.
If you have a good tenant, it is easy owning rental properties. But if you have a bad tenant, it can be a nightmare, and it comes down to treating your rentals like a business.
In most cases, making money with a condo in Northern Virginia is difficult because the condo fees kill your profit.
If you have a good property manager, they'll take care of all the headaches and the hassles, and there's not much for you to do as the owner other than cash the check every month.
The big risk with Airbnb is that people may go on vacation last when the economy starts to get worse.
I like buying single families because tenants tend to stay for a long time, and the turnover is a big expense.
Resources
Rental Income Podcast: Apple Podcast
YouTube: YouTube
Spotify: Spotify
Chris Colgan - EXP Realty - Powered by Place
- Text me 571-437-7575
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