Why and Where to Invest in Baltimore’s Real Estate Market

Baltimore may not be the first city that comes to mind when thinking about real estate investing, but it’s one of the better-performing markets in the U.S. Growth has been slow and steady in 2018, and the market has remained stable and successful.

Why Invest in Baltimore’s Real Estate Market?

What surprises investors the most is the affordability of Baltimore’s real estate market. The median home price here is $237,855 – much lower than some of the bigger real estate markets in the country. Affordable home prices mean that investors can use leverage to start and expand their real estate portfolios.

Baltimore offers dependable employment. The city has thriving tech, health care, and education fields. The Port of Baltimore also drives industry and jobs in the city. The port handled 38.4 million tons of cargo in 2017 alone.

Baltimore is also popular among college students, which means that landlords typically enjoy a steady and reliable stream of tenants.

The city has a cash on cash return and cap rate of 3.61%. Monthly rental income is about $1,524. Airbnb rental income is about $673 per month with a rental cap rate and cash on cash return of 1.31%.

Looking at data from Mashvisor, Baltimore is seeing growth in a wide range of home types:

• Condos: Prices are up 2.8% compared to 2017. Sales are up 3%.
• Townhomes: Prices are up 11.3% compared to 2017. Sales are up 2.2%.
• Single-Family Homes: Prices are up 9.8% compared to 2017. Sales are up 1.3%.
• Multifamily Homes: Rent prices increased by 0.5% compared to 2017, while vacancy rates have remained the same at 5.6%.

Where to Invest

Just like any other city, there are neighborhoods in Baltimore that are more desirable and may offer a better return on your investment than others.

Charles Village

Charles Village is the home of Johns Hopkins University, which makes it a smart place to invest in real estate. The neighborhood offers a mixture of homes, including condos and row houses.

Both students and faculty live here, which provides a steady stream of tenants. The neighborhood is well-connected to public transport, and 78% of residents are renters.

Rent prices in Charles Village range from $625-$4,250.

Waverly

Waverly is an historic village in the heart of Baltimore with access to public transportation and easy walkability. The neighborhood offers a mixture of homes, including row homes, detachedsingle-familyy homes, and semi-detached townhouses.

More than half of the people who live here are renters. Rent prices in Waverly range from $600 to $1,500.

Seton Hill

Seton Hill is centered around Saint Mary’s Park, which makes it an attractive neighborhood for renters. The area offers a mixture of row homes, both small and large.

Seton Hill is popular with students and staff of the University of Baltimore and the University of Maryland.

About 84% of residents are renters, which makes this neighborhood ideal for investors. Rent prices range from $850 to $2,100.

Although there’s competition for properties in Baltimore (inventory and listings have fallen), lower prices and a good ROI make it worth the effort to invest in the city.