Buying a rental property in the nation’s capital could be highly lucrative in the current market. The city is growing, and new apartments in Washington, D.C., are popping up all over the place, providing more opportunities for motivated investors.
The real estate market is showing signs of slowing down, but the rental market remains strong, so there has never been a better time to take the plunge. This guide examines whether purchasing one of the apartments for sale in Washington, D.C., is worth the money.
Washington, D.C., at a Glance
Nearly 700,000 people live in Washington, D.C., but the Greater D.C. area has a population of over 5.4 million. The region is the second-most populated metro area on the East Coast and has one of the highest populations in the entire country.
Washington, D.C., also has one of the country’s strongest economies. It features the second-highest median household income among major metro areas in the United States, thanks to its status as a government hub and international business hotspot. There’s plenty of opportunity in Washington, D.C., and people will want to be here as long as it remains the national capital.
Market Trends in Washington, D.C.
Keeping an eye on market trends can point you in the right direction as you decide whether to purchase one of the apartments for sale in Washington, D.C. These conditions are constantly changing, so gathering up-to-date information is a vital part of the process. Here are some factors to keep in mind.
Prices Remain High
The cost of buying an apartment in Washington, D.C., is high compared to the rest of the country. The city’s median sale price for an apartment or condo is $470,000, and while that number is down 3.1% year-over-year, D.C. remains an expensive place to purchase real estate.
Rental Prices Are Also High
The cost of apartments for rent in Washington, D.C., is also high, though, so you can expect to recoup your investment from your tenants. The median rent for a one-bedroom apartment in Washington, D.C., is about $2,300 per month, while the median for a two-bedroom unit is more than $3,100.
It’s a Buyer’s Market
We could be witnessing a buyer’s market forming in the D.C. area, as inventory is up 3% year-over-year, and contract activity is down 38.2% from 2021. Real estate of all types is sitting on the market for an additional 10 days compared to 2021 as well, opening up more opportunities for investors to find a deal.
Occupancy Rates Are Consistent
Rental rates are holding up despite the high rental prices in the D.C. area. About 96% of Class C and Class B apartments are occupied by renters, while Class A luxury apartments have an occupied rate of over 94%. There’s significant supply in the city, but occupancy rates are holding steady.
These market trends suggest that D.C. will continue as a robust rental market despite the considerable expense of living in the city. Investors can take advantage of Washington’s desirability by getting in on what could be a buyer’s market in the coming months.
5 Reasons to Buy a Rental Property in Washington, D.C.
The Greater D.C. area could be an excellent place to purchase an apartment as an investment property because you shouldn’t have any trouble finding someone to rent it. The city and surrounding areas have plenty going for them, which is why so many people want to live here. These attractive traits include the following:
1. Excellent Job Opportunities
D.C. is the hub of national politics and everything that goes along with it. The result is plenty of career advancement opportunities for attorneys, investment experts, bankers, chefs, and service industry professionals. There’s also a bustling international community in Washington, thanks to the abundance of embassies, assisting the job market even further.
2. Fantastic Culture and History
The nation’s capital is full of culture and history, including well-known spots like the Kennedy Center for the Performing Arts, the National Mall, the Library of Congress, and the Smithsonian museums. These venues make Washington, D.C., an attractive place for young professionals, helping fuel the rental market.
3. Great Neighborhoods
Anyone moving to D.C. has plenty of excellent areas from which to choose. The Capitol Hill area is loaded with culture and is the city’s epicenter. The Southwest Waterfront has an impressive culinary scene, DuPont Circle is full of trendy bars and restaurants, Georgetown features historic architecture, and Columbia Heights has a family-friendly vibe.
4. Outstanding Access to Transit
The Washington Metropolitan Area Transit Authority makes it easy to get around D.C. without a car. The trains travel throughout the downtown area; into suburban neighborhoods like Columbia Heights, Adams Morgan, and Woodley Park; and to surrounding towns and cities like Bethesda, Rockville, and Alexandria. A bus line also travels throughout D.C. and into Virginia and Maryland.
5. Active Outdoor Scene
Washington, D.C., is best known as a metropolis, but that doesn’t mean residents have to give up their favorite outdoor activities. The city is home to dozens of jogging and biking trails, and there’s hiking and camping to discover in nearby Shenandoah National Park. Some beaches on Chesapeake Bay are accessible in under an hour as well.
Young professionals want to live in Washington, D.C., and the rental market should remain strong because of this desire. Investors can be confident that there will probably always be people looking for apartments in the city.
Get Help Managing Your Rental Properties
Buying a rental property is an excellent investment because you’re likely to collect a return every month. The apartment you purchase will begin paying for itself as soon as you get a tenant, leaving you with a sizable asset after repaying your mortgage. The process becomes even easier if you hire a property manager to deal with the day-to-day.
Nomadic Real Estate offers property management services in the Greater D.C. area. Our team can find qualified tenants for your rental apartments and ensure everything goes smoothly for you as a landlord. Contact Nomadic Real Estate today for more information on our Washington property management services.