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Why Washington, D.C. Offers Some Great Opportunities for Real Estate Investors

The housing demand in our nation’s capital is on the upswing – but it is not growing quite as rapidly as other major cities in the U.S. That’s according to Curbed D.C., which in February reported that we’ve seen supply narrowly outpacing demand.

In 2016, officials in the District gave the green light to just over 4,600 residential units – a number second only to when the Census Bureau started keeping tabs in 1980. In total, just under 25,000 units were permitted for the area, a number that is approximately the same as the number in 2013 and 2014.

At the time, Freddie Mac predicted: “Washington, D.C. will continue to see an elevated amount of new supply despite higher forecasted vacancy rates in 2017 relative to the historical average.”


So how is this impacting flippers looking to turn a profit?

Last month, Curbed D.C. sharedstatistics from the Washington Business Journalfor five major local area counties and cities (outside D.C. proper) that provided the highest return on investment for real estate flippers and investors:

  • Prince George’s County: 80.4 percent, $117,223 average gain
  • City of Alexandria: 49.6 percent, $138,750 average gain
  • Montgomery County: 45.7 percent, $109,750 average gain
  • Prince William County: 36 percent, $79,225 average gain
  • City of Manassas: 33.1 percent, $72,500 average gain.

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As a whole, however,The Washington Post reports that the District had a 58.3 percent profit margin in Q1 2017, which is considerably higher than the national average of 47.4 percent during the same time period. And, out of every city and state in the nation, Washington, D.C. also had the highest number of home flips in Q1 according to ATTOM Data Solutions.

Driven by the housing demand, D.C. is also currently the fifth most expensive city in the country for renting, up from its previous place at number six.  This is a good sign for individual real estate investors who choose to hold and manage their rental properties, or for flippers who are investing in multifamily housing.

Trulia shared that currently, the median home sales price in the D.C. area is $615,000, with a $533 per-square-foot price tag. The median rent per month is $3,300.

D.C. area real estate agent Ed Woodtold the Washington Blade in April that the D.C. area “was in a much better position during and after the recession. We saw a flattening but then it picked up fairly quickly and the market has been really strong ever since about 2011, 2012.” Wood added that multiple offers are still in effect on many properties.

“A lot of the buildings that are going up in the city have been rental buildings as opposed to condos, and that’s because the long-term demographic outlook for the city – we’re still gaining about a thousand residents a month – is expected to be over a million by 2030, so there are a lot of companies from around the country who see this as a really good rental market, and they’re interested in the long term.”

Explore the opportunities available to both borrowers and real estate investors in Washington, D.C. and across the country by connecting with the team at Patch of Land today!

If you want to learn more, take a look at some of the most commonly asked questions we receive about real estate crowdfunding on a daily basis and find out why so many people are crowdfunding real estate projects across the country with Patch of Land.
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