Arlington County is in Northern Virginia (NOVA) and is one of the part of the Washington Metropolitan Area. When you hear “NOVA,” immediately think of two things: high rent and lots of jobs. Arlington real estate is definitely the place to be for real estate investors. There is no shortage of rent, people, jobs, growth, or tenants. While it has its challenges, like affordability, it’s an ideal market for a landlord.
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Growing, growing, and growing some more
The Metropolitan Washington Council of Governments projected that there will be 69,000 new residents by 2045. That would be a nearly 30% increase from today’s population of about 230,000. Where will all these people live and where does this current population live right now? They rent. Bingo.
Most people in this region rent. Based on Delta Associate’s predictions, rent will go up by 4% by 2018. This is great for rental properties, but does that mean the number of properties will outnumber residents and cause a low vacancy rate? Not necessarily. Delta Associates also predicts the vacancy rate will go down to 3.4% in late 2018, compared the 4.1% it was at in late 2015.
Everything looks like it’s going to increase: residents, jobs, construction of residential properties, and rent.
Is it possible to get a deal?
It’s no secret that investing in Arlington real estate is a pricey investment. The median sale price was $527,500 this past November. However, it looks like sale prices are slightly down in Arlington. In November 2015, the median sales price was $569,000, according to Long and Foster. While listing prices have increased, the sales to list price ratio (the comparison of how much the house was sold for compared to listing price) is slightly down (.0.06%).
It could be the time to try to snatch a deal in Arlington real estate.
How can real estate investors profit in such a pricey real estate market?
- Wait for it to be a buyer’s market, buy low
- Cash flow from high rents
- Wait for it to be a seller’s market, sell high
- Consider other rental strategies, like short-term rentals (they have higher rates)
Related: Is it a Buyer’s Market or Seller’s Market?
Number one and three seem obvious but in the NOVA region, investors can profit significantly with home appreciation. Hence, buying a property in this region is an optimal investment because home prices will soar.
As mentioned before, rents are very high in Arlington, VA and the price to rent ratio is also high, it was at 18.24 in November. What does this number mean? This ratio is a comparison of home prices to rental prices. Usually, consumers should consider buying the property if the ratio is under 15 and should rent if the ratio is above 20. With Arlington’s ratio, it can still make sense to buy a property but the rents are so high, that an investors can make their returns.
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Finally, Arlington real estate has two big advantages: college students and tourists. There are 35 universities and college in the D.C. Metro Area, and many of those students are commuters and spread out. Renting to college students can increase rental income because many students will pay-per-room, allowing the sum total of rental income to be a higher.
Essentially, the same concept applies to short-term or vacation rentals, like Airbnb investment properties. The nightly rate is set to be higher than what a traditional rental property’s nightly rate would be. There are numerous attractions in Arlington and the DC area that bring tourists from all over the world and country every year, ranging from the monuments to memorials to Smithsonian musuems to hip spots like Georgetown and U Street.
Buying an investment property in Arlington to list on Airbnb is strategy that can be more lucrative. Check out Arlington County’s new short-term rental regulations.
So, the market looks good and there are multiple way to maximize profits. Now, where do we go?
Related: 4 Different Ways of Renting Out Your Property
Top Neighborhoods For Arlington Real Estate Investments
We took a look at Arlington neighborhoods and picked neighborhoods with the highest average monthly rental income. The analysis also includes the average Airbnb occupancy rate and income, should an investor consider listing the property on Airbnb.
Keep in mind, these are neighborhood averages, meaning a property’s should be higher. Also, the median home price averages only accounts for single-family homes, townhouses, condos, and apartments.
Aurora Highlands
- Traditional Income: $3,418
- Airbnb Income: $2,097
- Airbnb Occupancy Rate: 51.58%
- Median Home Price: $887,000
North Rosslyn
- Traditional Income: $3,351
- Airbnb Income: $2,380
- Airbnb Occupancy Rate: 46.55%
- Median Home Price: $810,000
Clarendon-Courthouse
- Traditional Income: $3,205
- Airbnb Income: $2,569
- Airbnb Occupancy Rate: 33.17%
- Median Home Price: $689,000
Radnor – Fort Myer Heights
- Traditional Income: $2,404
- Airbnb Income: $2,383
- Airbnb Occupancy Rate: 56.65%
- Median Home Price: $569,900
Ballston-Virginia Square
- Traditional Income: $2,289
- Airbnb Income: $1,908
- Airbnb Occupancy Rate: 35.73%
- Median Home Price: $409,900
You can search for Arlington real estate investment properties on Mashvisor and get a property’s expected returns, the optimal strategy for a neighborhood, and the optimal property type for a specific area.
Investing in a pricey area definitely has benefits. Arlington is a market that will continue to grow and is surrounded by equally growing areas. The key is to buy low, sell high, and keep a positive cash-flow with high rents in the meantime.
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