What is the deal with the Capital this year? Should you jump into the Washington D.C. real estate investing market? Short answer, yes, but not too fast. You have to assess where you’ll land first. For the long answer, read along…
Washington, D.C. Real Estate Investing Market Now
In general, the local economy in D.C. relies heavily on the government. The majority of the city’s population are government employees. No surprise there. Yet, for the past six years, government jobs have been decreasing for budget cut purposes. This has caused D.C.’s population to decrease. To be blunt, there are no signs that things will get better for D.C.’s economy anytime soon. The population will continue this trend, and government jobs will stay as is. In fact, government salaries are considered somewhat low and continue to support stagnant single family homes.
What does this mean for Washington D.C.’s real estate investing market? Well, home prices are quite high in comparison to potential income. And with the population and government jobs decreasing, investing in single-family homes will be challenging. In fact, things may be a bit shaky in the Capital at the moment when it comes to traditional real estate investing.
Related Article: Best Places to Invest in Real Estate: 7 Cities with Highest Returns
However, with that being said, there are a few good things going on for Washington D.C. real estate investing. It is true that home prices are high, but they are still within reason in comparison with the population’s average income. This means that mortgages have low to average risk. So, this just might work in your favor if played right.
And if you’re set to invest in Washington D.C. real estate investing, then you might also want to think outside the box…
Washington D.C. is an amazing tourist site. For instance, last year alone, DC received 21.3 million visors. The local economy gained $7.1 billion in visitor spending! People are always interested in visiting the capital. Its unique history makes in an important landmark on the US map. So, naturally, the city attracts foreigners from all over the globe and locals from all over the country.
This is good news for the Washington D.C. real estate investing market integration with Airbnb.
Airbnb is mostly the go-to choice when it comes to renting a place for just a few days. It has become a popular choice for those looking for alternatives to hotels. People find it cheaper for one. They also like to mingle with the locals. So, you can really have a great potential at Washington Dc real estate investing with Airbnb.
With that being said, be mindful of the D.C.’s laws and regulations on Airbnb. You don’t want to be breaking any laws. So, before listing your property on Airbnb, make sure you submit the property for a full inspection. This is needed to ensure that the property falls within the District’s safety guidelines. You’ll also need to send notification letters to all neighbors informing them that you’re renting the property. And finally, make sure you operate your licence under your name and not a corporation’s. Once you make sure you’re in line with the laws and regulations, happy real estate investing in Washington DC!
Related Article: Cities With The Least Airbnb Legal Issues
Where to Invest?
Now that you know about Washington DC real estate investing market, here’s some advice on where to potentially invest.
Consider these neighborhoods with the highest Airbnb rental income:
- Capitol Hill: $3,870/mo
- National Mall- West Potomac Park: $3,247/mo
- U Street Corridor: $3,143/mo
- Susrum Corda Cooperative: $3,104/mo
- Swampoodle: $2,781/mo
These above areas receive the highest average of rental income because their locations are closest to D.C.’s landmarks. However, if you don’t find affordable houses there, you can…
Consider these neighborhoods with lowest median home price:
- Penn Quarter: $442,000
- Dupont Circle: $515,000
- National Mall- West Potomac Park: $589,000
- Sixteenth Street Heights: $598,000
- Observatory Circle: $599,000
The Bottom Line…
Overall, even though Washington D.C.’s economy may not be at its best, you can turn things around to your benefit if you consider Airbnb, which can be a quite profitable solution. And while the present moment may not the best for traditional real estate investing in Washington D.C., at least you’ll have low mortgage risks on your side either way.
Mashvisor can always help you find the best property by showing you the average income, cash on cash, cap rate, among other calculations. Begin you search now!