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Here's the situation, I wanna buy some real estate purley for investment purposes. I've been pondering this idea for quite some time now and I want to take some action. My friends are doing it and real estate has been booming for years so why not right?

I was wondering for you people who may know about real estate, or have bought some in the past for whatever reason or just for those of you that could be giving me any suggestions. It's my first time doing this and on this site, and we have experts at everything!

So.... I was thinking of buying in southern maryland (silver spring maybe) and renting something out to ppl there for a couple years since Northern VA is so expensive now. Or maybe still investing into Northern VA this fall and holding is as long as I can. Someone actually told me that Arizona is a good place to shop because homes in Pheonix are so cheap and the market over there is going to go up. Also that population is growing over there. What do some of you suggest?

I am no expert, but if you are looking at Silver Spring, be prepared to pay about the same thing you would in NoVA. Maryland (Montgomery County especially) prices are high. If your goal is to put up some money, even in an expensive area (i.e. anywhere around DC), I think demand will be about the same for MD and VA. I can't predict what the market will do in a couple years (that's what investing is all about!), but from what I've seen, there is no sign of a slow-down in the near future.

I bought a house last November in Germantown, MD for $201K. It is a piggyback townhouse, end unit, two bedrooms, 1 full, 1 half bath, tiny front yard - maybe 1200 sf. Not much for 201K. But, we saw an identical unit listed recently for $288K. $87K profit in 8 months! Pretty nice, although we are planning on living there for a few years.

If it were up to me, I would predict a continuation of the high demand at least for 3-5 more years. That means real estate in places as far away as Harrisburg, PA and Charlestown, WV could see dramatic increases in value - as they already have been over the past few years.

BUT!!! I am more conservative in my investments, and buying real estate that far away from the huge job base (DC area) could be risky. If demand decreases, AND IF INTEREST RATES RISE, you could have a tough time unloading a place in WV or PA.

Here is the key, IMO. Right now, the economy is growing - slowly. But oddly, interest rates (mortage rates) have not been increasing. But they will. Only time will tell when. And when they do, decreased demand is going to stop the ridiculous increases in home values. It probably won't drive prices down - for a while - but people who snatched up real estate in certain areas may have a hard time selling.

My theory is that demand will always be present in the DC area. There are a ton of jobs that pay buku dollars. And the people that make that much money don't always mind spending extra money for gas & auto maintenance, and wasted time commuting. But that has to reach a point. Either the jobs start decentralizing, or the people start relocating.

My advice? (at least for the DC area)

If you have the financial backing, and are willing to accept moderate risk, buy something close to DC (MD, VA). But watch the market closely - as soon as rates start rising, you may have a hard time selling it; which you don't really want to do before two years anyway to avoid the capital gains penalty.

Just remember the words of Mr. Buffett, "Bulls make money, Bears make money, Pigs get slaughtered."


I know nothing about other markets in the US, and like I said in the beginning, I am not an expert.

Just my

awsome redeem...

oh and you may not be an expert but that was pretty good advice... I was also thinking of ashburn and leesburg... further west into loudon county...

That's probably a good idea. I don't know VA too much (other than NoVA), but it is my understanding that it is similar to the Montgomery County situation. In MD, everyone in Rockville, Gaithersburg, Silver Spring, etc. seems to be following 270 North to Frederick - and even farther. Many of my friends have already gone there, just to find an affordable home.

If the push-away from DC in NoVA is anything like what it is in Mo County, you should be able to reap large rewards by buying something on the outskirts - if you buy it, they will come.

Good luck, man. Remember the rates. Rates. Rates. It is the all-important key to real-estate investment. You want to buy when they are low, and you want to sell when they are low - but they never stay low for too long....




By the way, don't forget about taxes. I almost moved to Hagerstown, MD - about an hour farther from my office than Germantown. We found a house for a similar price to the one we bought, and it was MUCH bigger, BRAND new (as in not finished yet), and in a beautiful setting.
The problem? Other than being so far away from most potential future jobs, it's location qualified the property for city taxes. D'oh. Keep an eye on that - high-tax zones can be tough to do business in.

Current taxes in Germantown = $120/mo

Taxes that would have been incurred had I moved to Hagerstown? = $350/mo

bump

It also depends on if you want to take a risk on an up and coming area. Not everyone is moving out toward the country. There are many professionals who are fed up with crazy commutes and want to move closer in to the city. Some areas in the city worth considernig at the moment.

Near H Street, NE DC, Brookland, NE, Eckington, NE, the Florida Ave Corridor (SW of 9th Street, NW to NY Ave), Ledroit Park, NW... some areas of Columbia Heights, NW... Southwest. There are more but those are off the top of my head.

Some areas in NOVA worth considering - areas of Falls Church and SOME parts of Arlington (most are expensive but you can find some places here and there)...

Just my 2 cents living in the city and seeing it change sicne growing up and also experiencing first hand my property value going up over $300K.

I am also from the mindset that this area is a little more cushioned than many b/c of the amount of jobs and gov't agencies relying on jobs.

I would also look to areas where potential development is going in such as Merrifield, VA, areas in Loudoun (obviously) and like some people said, as far out as West VA.

It's all in what you feel comfortable with and can afford.

PM me Punu. I know some things... and some people.

BossHog wrote:PM me Punu. I know some things... and some people.

The Danny?

Arizona is good, I was looking at Chandler, Gilbert, etc. BUT, you missed the boat on Arizona. You can still get in but it's not as cheap as it was 1-2 years ago.

Be careful! Las Vegas and Florida have blown up quick. And those that get in late may get stuck. Some say Texas is the next on the rise. Also heard that Cleveland and/or Cincinatti is coming up to. A lot of urban development along the waterfront. Nice waterfront condos for 150-200.

If I were you I'd look for something decent in Arizona, but you will always be safe around major cities like DC, NY, LA, etc. If you can get another property in the DC area then go for it. It's easier to manage something you live near and DC has constant government and high tech growth. Not going anywhere.

I'm in the same boat. We were deciding on flipping properties, Arizona, or just getting investment rentals. But we might just take the equity and get a bigger long term home.

Tough decision. I've gone back and forth.
Go with your gut.

Beware the bubble. This housing market is weirdly similar to the day-trader explosion that preceeded the dotcom burst. Make sure you are insullated from fluctuations in the real estate market: don't have too large a share of your assets tied up in real estate, and be prepared (read: be able to afford) to keep the property longer than you planned if prices go down.

What about tiny little Delaware...yes Delaware still a good value here. We have folks coming here from D.C... Baltimore and N.J/N.Y paying cash for homes mainly because our property taxes are so low. Some of my clients tell me their property tax payment (elsewhere) was more then their entire mortgage payment they now have in Delaware. Oh did I mention I'm a licensed Delaware Realtor...let me know if you want to come up and tour a few properties!