The northeast of the country has always been a big market for real estate investors. The region’s large metro areas, the strong economy, and the ever-growing population have consistently acted as strong anchors for the housing market. A prime example of this is Washington, DC and the cities that surround it. One particular city in this metro area, Arlington, will be the focus of this article. So what are the Arlington real estate market trends that you can expect in 2020? And should you invest in Arlington real estate next year? Keep reading as we provide you with 5 reasons to invest in Arlington VA real estate.
Arlington VA Real Estate Market – 5 Reasons to Invest
Real estate investors should never jump in and invest in an income property without careful consideration of all the dynamics that characterize a particular housing market. The key to making money in real estate is to assess the current state of the market and analyze some of the potential trends that are likely to shape it in the near future. So here are some of the reasons why you should consider investing in the Arlington VA Housing market in 2020.
1- The city boasts a stable job market
One of the advantages of being so close to the nation’s capital is the fact that Arlington benefits tremendously from a stable and evergreen job market. Government employment is very high in the DC area which results in constant demand for Arlington rental properties. As a result, investing in Arlington real estate will enable a real estate investor to generate consistent rental income thanks to the continuous influx of government employees and contractors.
2- The local economy is strong
On top of being the political center of the US, the DC metro area is a strong economic hub. Likewise, Arlington and other neighboring cities benefit from this as well. The area is home to several large financial institutions as well as a number of tech start-ups. In fact, tech giant Amazon has recently announced that it will establish a new HQ in the Crystal City neighborhood of Arlington. The economic impact of this development cannot be overstated. The new headquarter is expected to create a minimum of 25,000 high-wage jobs and to result in an economic impact of around $15 billion by 2030.
3- The Arlington real estate market is fairly landlord-friendly
When compared to other areas in the northeast, Arlington’s regulations are quite landlord-friendly. In fact, there are very few laws that protect the tenant at the expense of the landlord. If you are looking to invest in the DC area without dealing with a host of laws that favor tenants, the Arlington real estate market is your best bet.
4- The city is undergoing massive redevelopment
Another reason that makes this the ideal time to make an Arlington real estate investment is the massive redevelopment effort in the city. The aforementioned Amazon headquarter has prompted Arlington County to commit more than $220 million for transportation improvements and several private developers have submitted plans for the redevelopment of key areas in the city. This will aid the real estate appreciation of investment properties in the area and will help to attract more and more tenants.
5- Virginia has a favorable tax climate
High real estate taxes can severely affect your bottom line. Fortunately, the Virginia housing market boasts a favorable tax climate for real estate investors. In fact, Virginia has some of the lowest property taxes in the country. Homeowners are expected to pay less than 1% of the property value per year, which is significantly lower than the national average.
Some Key Facts About the Arlington Real Estate Market
Before deciding where to invest in real estate, there are a few facts that you need to be aware of. Despite the high returns that an Arlington real estate investor can potentially generate, there are a few things that have to be navigated carefully. Let’s take a look at some of the most important factors that you need to keep in mind:
1- Arlington short-term rental laws are not conducive to Airbnb real estate investing
While short-term rentals are not illegal yet, Arlington Airbnb laws are very restrictive. Only the primary residence of the homeowner can be used as a short-term rental and the number of guests is limited to six. Furthermore, the current Airbnb regulations are not the only thing real estate investors should worry about. There are some indications that Arlington might follow suit with other counties in the DC area and outright ban short-term rentals. Consequently, Airbnb Arlington is not a viable strategy and non-owner occupied rentals are not recommended investments in the city.
2- The Arlington real estate market is a strong seller’s market
Knowing whether the housing market is a seller’s or buyer’s market is a critical component of the pre-investment analysis. In the case of the Arlington real estate market, the current dynamics are strongly in favor of the seller. Arlington house prices continue to climb and demand is at record highs. Having said that, a seller’s market should not deter you from investing in the Arlington real estate market. As long as you get your investment property analysis right, you will be able to find profitable houses for sale in Arlington.
Let’s now take a look at some Arlington real estate market data.
Arlington Housing Market Data
- Median Property Price: $691,085
- Price per Square Foot: $449
- Price-to-Rent Ratio: 23
- Traditional Rental Income: $2,502
- Traditional Cap Rate / Cash on Cash Return: 1.7%
Data for the Best Neighborhoods in Arlington for Real Estate Investing
- Median Property Price: $325,931
- Price per Square Foot: $340
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $2,328
- Traditional Cap Rate / Cash on Cash Return: 3.6%
Columbia Heights West
- Median Property Price: $224,748
- Price per Square Foot: $238
- Price-to-Rent Ratio: 12
- Traditional Rental Income: $1,528
- Traditional Cap Rate / Cash on Cash Return: 3.3%
- Median Property Price: $302,580
- Price per Square Foot: $302
- Price-to-Rent Ratio: 13
- Traditional Rental Income: $1,957
- Traditional Cap Rate / Cash on Cash Return: 2.9%
- Median Property Price: $345,583
- Price per Square Foot: $357
- Price-to-Rent Ratio: 21
- Traditional Rental Income: $1,396
- Traditional Cap Rate / Cash on Cash Return: 2.7%
- Median Property Price: $401,199
- Price per Square Foot: $423
- Price-to-Rent Ratio: 14
- Traditional Rental Income: $2,314
- Traditional Cap Rate / Cash on Cash Return: 2.3%
- Median Property Price: $380,000
- Price per Square Foot: $345
- Price-to-Rent Ratio: 17
- Traditional Rental Income: $1,911
- Traditional Cap Rate / Cash on Cash Return: 2.0%
With the economy trending upwards and demand increasing at a rapid rate, this might be the perfect time for Arlington real estate investing. Use the Mashvisor Property Finder and start looking for Arlington houses for sale right now!
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