Top Neighborhoods in Baltimore Real Estate Market

Are you still in the process of choosing a real estate market to invest in this year? If your criteria include buying rental property in an affordable market with high potential for ROI, then we recommend checking out Baltimore, MD. Why and where should you invest here? Take a look at the top positive trends going on right now in the Baltimore real estate market and which make it a top location in 2020. Moreover, we ran a Baltimore housing market analysis to provide you with a list of the top neighborhoods in the city for buying an investment property. So without further ado, let’s get started.

#1 Baltimore Real Estate Market is Affordable

Baltimore is located near some of the hottest housing markets in the nation like Washington DC, Philadelphia, and New York City. Unlike these markets, however, affordability is not an issue for Baltimore real estate. According to the Baltimore Business Journal, declining inventory has helped push home prices in the Baltimore area to a record high. But when comparing prices in Baltimore to nearby markets, real estate investors realize that Baltimore is far more affordable. The median listing price of homes for sale in Baltimore, MD is $285,590 according to Mashvisor’s data. This is significantly lower than the US median home price of $320,000.

Moreover, home values in Baltimore increased by 1.6% last year and by over 29% since September 2012 according to the Zillow Home Value Index. This tells us that the Baltimore real estate market has a good appreciation rate. For investors, this means you can find income properties for sale in Baltimore that are affordable and which value will increase over the long-term. Whether you’re a first-time real estate investor or you’re looking to add a new property to your real estate portfolio, this makes a Baltimore investment property a smart asset to acquire in 2020. Use our Property Finder to find profitable investment opportunities within your budget in a matter of minutes!

#2 Strong Economy & Job Market

Investors know that having a strong economy and job market is an important feature of the best places to invest in real estate. When looking at economic trends in Baltimore, you’ll discover that the city enjoys this as well. Founded in 1729, Baltimore is a major historical destination and was originally a working-class port town with a focus on shipping, transportation, and manufacturing. Today, however, the city is the economic and cultural hub of Maryland and known for its diverse economy, dynamic Inner Harbor, and the world-renowned Johns Hopkins Hospital.

Furthermore, Baltimore’s proximity to Washington DC has led to years of federal investment and many jobs are emerging in this industry. The city also ranks among the 3 large US metro areas for IT jobs like computer hardware engineers and information systems analysts. Other growing industries in Baltimore are life sciences, manufacturing, logistics, energy, healthcare, and agriculture. All of this is motivating more people to move to work in Baltimore – and these people will need places to live. The unemployment rate is the Baltimore area is 11.9% which is lower than the national unemployment rate of 13.3%. These current Baltimore real estate market trends make is a good investment location in 2020.

#3 Growing Renter Population

After decades of population loss, Baltimore’s population is once again stable and slowly growing. As mentioned in the previous point, the growing job market in Baltimore is encouraging a lot of people to move to live and work there. Right now, Baltimore is actually the most populated city in Maryland and the 30th-most populous city in the US. In addition, many of this new population are renters and almost half (47%) of the households in Baltimore are renter-occupied. For Baltimore real estate investors, this translates into strong demand for rental properties in 2020.

Find a Profitable Traditional Rental Property

According to our Baltimore real estate market analysis, the monthly rental income you can expect to earn from owning a rental property here is $1,676. Of course, this is just the average – you can earn more depending on which neighborhood in Baltimore you’re investing in as well as the type of rental property you own. For example, Mashvisor’s property data shows that the average rental income in Baltimore is $1,897 for condos for rent, $1,692 for single-family home rentals, and $1,630 for townhouses for rent. Given the low cost of Baltimore homes for sale and the good rental income, investors can make positive cash flow from owning any type of property.

#4 Airbnb Baltimore is Profitable

Another way to invest in the Baltimore real estate market 2020 is by owning a short-term rental like an Airbnb. However, you must keep in mind that Baltimore is one of the many major US cities with strict Airbnb regulations. In 2018, the City Council passed an Ordinance (Council Bill 18-1089) establishing many requirements for short-term rentals. Based on Airbnb regulations in Baltimore, a short-term rental is a rental of all or a portion of your home for periods of less than 90 nights. Important laws to keep in mind to run an Airbnb Baltimore are that hosts must:

List only their primary residence
Obtain a license from the City and pay $200 to renew it bi-annually
Display their license numbers in listings advertising the rental
Comply with city building, fire, and related codes
Keep records of all rentals and designate/post an emergency contact in the unit
Register with the State Comptroller for collection of state sales tax

According to these Airbnb regulations, buying an investment property for the sole purpose of renting it out on Airbnb is illegal in the Baltimore housing market. What you can do, instead, is go for house hacking. This is an investment strategy in which you buy a duplex, triplex, or another small multi family home to live in one unit and rent out the rest on Airbnb. According to Airbnb analytics, you can expect $1,944 monthly Airbnb rental income, $113 average daily rate, and 51% Airbnb occupancy rate. As a result, investing in Airbnb Baltimore (legally) is a profitable strategy as well.

Best Baltimore Neighborhoods for Real Estate Investing

Nicknamed the “City of Neighborhoods,” the Baltimore real estate market is home to hundreds of different districts, providing plenty of options for investors. So, where should you begin your search for Baltimore houses for sale? We used our Real Estate Heatmap and property data to run an analysis on the different neighborhoods across the city. Our analysis has revealed that the following are the 10 best neighborhoods in the Baltimore MD real estate market 2020:

#1 Coldspring

Median Property Price: $129,900
Average Price per Square Foot: $66
Traditional Rental Income: $1,860
Traditional Cash on Cash Return: 6%
Airbnb Rental Income: $2,982
Airbnb Cash on Cash Return: 10%
Average Airbnb Daily Rate: $137
Airbnb Occupancy Rate: 52%

#2 Four by Four Baltimore real estate market

Median Property Price: $128,800
Average Price per Square Foot: $106
Traditional Rental Income: $1,640
Traditional Cash on Cash Return: 6%
Airbnb Rental Income: $2,504
Airbnb Cash on Cash Return: 9%
Average Airbnb Daily Rate: $92
Airbnb Occupancy Rate: 59%

#3 Parkview – Woodbrook

Median Property Price: $125,250
Average Price per Square Foot: $70
Traditional Rental Income: $1,299
Traditional Cash on Cash Return: 6%
Airbnb Rental Income: $1,581
Airbnb Cash on Cash Return: 9%
Average Airbnb Daily Rate: $127
Airbnb Occupancy Rate: 48%

#4 Easterwood

Median Property Price: $82,350
Average Price per Square Foot: NA
Traditional Rental Income: $1,270
Traditional Cash on Cash Return: 8%
Airbnb Rental Income: $1,476
Airbnb Cash on Cash Return: 8%
Average Airbnb Daily Rate: $107
Airbnb Occupancy Rate: 49%

#5 Radnor-Winston Baltimore real estate market

Median Property Price: $165,000
Average Price per Square Foot: $172
Traditional Rental Income: $1,640
Traditional Cash on Cash Return: 4%
Airbnb Rental Income: $2,780
Airbnb Cash on Cash Return: 7.6%
Average Airbnb Daily Rate: $100
Airbnb Occupancy Rate: 54%

#6 Towanda-Grantley

Median Property Price: $149,900
Average Price per Square Foot: $70
Traditional Rental Income: $1,900
Traditional Cash on Cash Return: 8%
Airbnb Rental Income: $1,695
Airbnb Cash on Cash Return: 7%
Average Airbnb Daily Rate: $93
Airbnb Occupancy Rate: 42%

#7 Coldstream Homestead Montebello

Median Property Price: $86,337
Average Price per Square Foot: $60
Traditional Rental Income: $1,052
Traditional Cash on Cash Return: 5%
Airbnb Rental Income: $1,629
Airbnb Cash on Cash Return: 7%
Average Airbnb Daily Rate: $83
Airbnb Occupancy Rate: 40%

#8 Lucille Park Baltimore real estate market

Median Property Price: $153,000
Average Price per Square Foot: $123
Traditional Rental Income: $1,640
Traditional Cash on Cash Return: 5%
Airbnb Rental Income: $2,271
Airbnb Cash on Cash Return: 6%
Average Airbnb Daily Rate: $84
Airbnb Occupancy Rate: 57%

#9 Lower Herring Run Park

Median Property Price: $145,000
Average Price per Square Foot: $144
Traditional Rental Income: $1,455
Traditional Cash on Cash Return: 5%
Airbnb Rental Income: $2,216
Airbnb Cash on Cash Return: 6%
Average Airbnb Daily Rate: $90
Airbnb Occupancy Rate: 68%

#10 Poppleton

Median Property Price: $147,225
Average Price per Square Foot: NA
Traditional Rental Income: $1,770
Traditional Cash on Cash Return: 7%
Airbnb Rental Income: $1,965
Airbnb Cash on Cash Return: 6%
Average Airbnb Daily Rate: $95
Airbnb Occupancy Rate: 55%

As you can see, the real estate market in Baltimore is thriving. Make sure to use Mashvisor’s investment tools to find the best income properties for sale in Baltimore before your competitors. To start searching for and analyzing Baltimore investment properties in your neighborhood of choice, click here.

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Top Neighborhoods in the Baltimore Real Estate Market 2020