Top Tips When Buying Investment Property in Maryland
Are you looking to invest in Maryland real estate? If you are, now’s the time!
So long as you do it right, real estate investing can offer some serious perks. From passive income to equity to a more diversified portfolio, real estate can benefit you in more ways than one.
But why is investing in Maryland real estate such a good idea?
First and foremost, parts of Maryland are in close proximity to Washington, DC. Many people prefer living in Maryland and commuting to the district thanks to the affordable quality of life. In fact, it’s this accessibility that helped stabilize property prices during the economic downtown of 2008.
Secondly, the rental market is strong. More and more people are considering renting rather than owning a home. That’s because homes are increasingly becoming unattainable due to high property values and high property taxes.
What’s more, Maryland is home to a vibrant economy, well-established communities and offers convenient access to the area’s major urban centers.
Just starting out? If you are, following insider tips can help you make the most out of your investment. While a rental investment can highly boost your financial status, proper research is key.
In this article, we here at McKenna & Vane Property Management will delve into the basics of purchasing an investment property in Maryland. Follow our recommendations to minimize mistakes and maximize the potential of your purchase.
What is the Maryland Real Estate Market Like?
Currently, Maryland is ranked among the top 10 wealthiest states in the country. It also has the highest median income in the country. Maryland’s economy is diverse and driven by industries such as manufacturing, technology, bio-health and life sciences, and aerospace and defense.
Thanks to all these industries, job growth has spiked, leading to increased rental demand. Demand for rental homes exists on every income level. So, if you are thinking of investing in Maryland real estate, now is the time!
Top Tips for Real Estate Investments in Maryland
When investing in real estate, due diligence is key. This is especially true if you are a first-time investor. Underestimating expenses, overpaying for the property, getting poor financing and skimping on research are some of the potentially costly mistakes that can derail your success.
Here are some top tips to help you make the right investment move.
1. Determine Your Price Range
One crucial thing you’ll need to consider when investing in real estate is the type of property to invest in. You have many options to consider in Maryland, from condos to mansions to villas.
Determining your price range helps you have a closer view of the market. Besides saving valuable time, that will help you focus on achieving your investment goal.
To properly determine your price range, make sure you also consider expenses such as HOA fees and associated taxes. It isn’t uncommon for such expenses to amount to a significant sum of money.
2. Opt for Areas that Offer the Highest Return on Investment
When investing in real estate, the ultimate goal should be to create wealth and receive a consistent passive income. And, of course, you’d want to earn as much ROI from your investment as possible.
So, keep an eye out for areas that provide the highest rent-to-purchase price rate. In other words, invest in a property that is going to generate the most profit for every dollar invested.
As you calculate the potential rate of return for an investment, make sure to account for expenses as well.
3. Invest in the Right Neighborhood
Location, location, location – it’s every real estate agent’s mantra, and for good reason. Buying in the right location can guarantee great tenants, high rent and home value appreciation.
On the flip side, buying in the wrong location can mean high vacancy rates, high tenant turnover rates and an overall bad rental property experience. Under these circumstances, you’ll certainly have a hard time turning a profit.
So, invest in areas where a quality tenant would want to live in. Typically, these are areas that have good schools, access to public transits, low crime rates and access to quality amenities.
4. Boost the Desirability of Your Investment
Owning an investment property is only one part of the equation. Now, to succeed as a landlord, you’ll need to make your property stand out from the rest of the competition. And how exactly do you do that? By boosting your property’s appeal.
The extent of boosting appeal depends on how rent-ready your property actually is. Of course, if you buy a fixer-upper, then significant improvements may be necessary. However, if you buy a move-in ready home, then you may only need to work on the aesthetics.
5. Always Screen Prospective Tenants
Difficult tenants are every Maryland landlord’s worst nightmare. They are high maintenance, cause negligent damage and often pay rent late. These are the types of tenants you want to avoid.
But how will you be able to avoid them? Subjecting all applicants to a meticulous screening process. The process should, among other things, be able to qualify each applicant on the basis of their income, creditworthiness, as well as rental, criminal and employment histories.
6. Hire a Property Management Company
More often than not, beginner investors aren’t aware of what they’re getting themselves into. The day-to-day responsibilities can quickly become stressful and overwhelming, especially if you own a few rental units.
Hiring a professional property management company can help save you time and stress. For a small fee, a good company like McKenna & Vane will provide you with comprehensive services to help you achieve peace of mind.
In a Nutshell: Real Estate Investing Tips in Maryland
Maryland is a great investment destination. Property values are appreciating, there is a strong rental market, and it’s within commuting distance to Washington, DC.
McKenna & Vane Property Management understands the local market trends and can help you make the right investment decisions. Contact us to learn more!
