Whether you’re new to buying rental property in Virginia or a veteran investor, you want to choose markets that will give you the greatest return on your money. Many factors can play into a successful investment purchase, whether it’s obtaining a low purchase price, high rental rates in the area, an abundance of good renters, or high likelihood of appreciating in value. Here are the top five real estate investment markets you’ll want to take a look at in Virginia.
Greater Richmond was included in Realty Trac’s list of hidden gems for single family rental markets in 2016. This is partly attributed to its large millennial population accounting for 33% of the nearly one million population. Millennials are more likely to rent over buying a home and this could mean an abundance of potential renters in the area. Just 1.3% of institutional investors purchased a property in the first part of the year, meaning prices for property are still reasonable and yields are good.
After the 2006 slump in the area, landlords have begun selling their single family rentals to make a long-delayed profit. However, they are mostly selling these homes to first-time home buyers, rather than investors. This leaves existing renters who can’t yet buy a home seeking new housing. You’re likely to find good tenants if you can provide affordable housing in the area. Also with this increase in demand from rentals will come higher rents.
If you’re handy, Tidewater is a great place to invest in real estate. Great fixer-upper deals are available in the $100,000 to $150,000 range. Put in another $10,000 to $20,000 and you’ll have a solid rental property that will attract desirable tenants.
With a population of around three million residents, there won’t be a shortage of tenants looking for housing. Plus, the region has a large concentration of military personnel who tend to treat property well and move often, meaning they are likely to rent, rather than buy. Plus, you may be able to collect rent via payroll allotments since the military may be covering their living expenses. Aside from military, Tidewater is made up largely of blue collar workers that could result in long-term tenants.
Green Bay might be the best place to invest in Virginia if you’re basing your decision solely on cash-on-cash return on investment. At a gain of more than 14%, this return is hard to beat. Median property price is just $118,000 so it’s also easy for an investor to enter the market. Plus, traditional rental income is great at an average of $2,100 per month.
Another great option for Virginia investments in property in Chase City. Traditional cash-on-cash return on average is greater than 11% with an average rental income of $1,150, higher than most areas. While rents are high, property prices are low, with the median property price right around $95,000. Chase City’s cost of living is 20% lower than the national average so tenants shouldn’t have difficulty coming up with rent.
Less than 10 miles from the nation’s capital of Washington, D.C., Alexandria provides a great opportunity for investors who may have a large amount of capital. According to Forbes, the D.C. metro area was among the 20 best housing markets to invest in 2018. The area boasts excellent job growth and home values are expected to appreciate, an added bonus for an investor.
Also, since federal jobs aren’t going away any time soon and the market out prices most potential homeowners, you can expect there to be a steady stream of renters with a great income.
If you’re just breaking into the Virginia market, you’ll want to work with a local real estate agent throughout the process. They have the best pulse on the market and can provide their expertise on market pricing, which neighborhoods will suit you best, and where to find the best investments. Experienced agents can provide guidance and support whether you’re just entering the market or scaling up your portfolio.
Clever Partner Agents are able to offer on-demand showings — sometimes in less than an hour — so you know you won’t miss out on a good property. Speed is key, especially in competitive markets. Plus, you’ll get a $1,000 buyer’s rebate on any home you purchase for more than $150,000.