Washington, DC is commonly known for being home to the White House and the Capitol Building, but did you know that DC used to be covered by an ocean? Despite this, it became one of the top places to live.
For investors, big cities like DC are attractive options. Before jumping into investing in this popular area, there are a few things to know.
The rental market is changing around the country, but what is there to understand about DC rental properties specifically? Keep reading to find out.
1. Average Rental Prices
The first thing you should know about DC rental properties is the average rent. If you want to invest in DC rentals, knowing rent prices can help you decide if the property is a good value or not.
The type of rental property that tends to be most common in DC is a one-bedroom apartment. The average price for this apartment type is almost $2,500.
A studio apartment rent price is a little over $1,800, a two-bedroom is $3,430 on average, and a three-bedroom apartment in DC is around $4,300.
It’s important to note that rent prices continue to increase around the country, including in DC. Property managers can help investors find good tenants who are willing to pay increased rent prices in DC.
2. Prices Vary by Neighborhood
Rental properties in Washington, DC vary in price depending on the neighborhood. As an investor, you might be looking for more affordable neighborhoods to purchase real estate. Those include:
- Wesley Heights
- McLean Gardens
- River Terrace
- Lily Ponds
- Mayfair
- Glover Park
If you have a larger investment budget, you might be looking at something in an expensive neighborhood. Although you’ll be paying more for the initial purchase, it might be easier to receive a return on investment.
Plus, expensive neighborhoods tend to have more growth and better communities to attract renters. The most expensive neighborhoods in Washington, DC are:
- Adams Morgan
- Foggy Bottom
- West End
- Downtown Penn
- Chinatown
In these areas, you’ll likely find renters that make an annual average salary of $75,000 or higher.
3. Rental Vacancies Will Decrease
In 2021, many investors and landlords dealt with rental vacancies due to the pandemic. Big cities were hit the worst by rental vacancies in general, but DC rental vacancies were slightly down.
The trend of decreasing rental vacancies is expected to continue through 2022 which is good for landlords. However, it’s not likely a drastic change will occur, but the vacancies will slowly decrease.
This is largely thanks to the fact that the market is currently a seller’s market meaning there aren’t enough homes on the market to tailor to buyers’ needs. Home prices have increased because of this.
Those who cannot afford to buy a home in a seller’s market turn to renting options instead.
DC Rental Properties: Are You Ready to Invest?
Whether you are working with a property management company or not, investing in big cities like DC proves to be beneficial for investors. DC rental properties are a great addition to real estate investment portfolios.
When looking into the market, it’s important to know the above three facts. Note average rent prices, prices by neighborhood, and a decrease in vacancies.
For more articles on real estate, check out the other posts on this blog.
