Washington Metropolitan Area Investing
Why The D.C Metropolitan Area Is Safe Bet For Investors
The stability of an area’s real estate market is primarily predicted on the local economy that surrounds it. Cost of production is often mistaken for the main determining factor of value. However, in real estate the cost of development may bare no relationship to market valuation.
Why? It’s really the old notion of supply and demand. People will always have a demand for housing, but additional land cannot be created. Real estate by its nature is finite. Even more finite is real estate with commuting proximity to the federal government. Federal Jobs promote stable, local, well paid workforce. Thats why a 6000 square ft. custom home built with all the bells and whistles in the hills of the Blue Ridge Mountain has less value than 1200 ft. row house that is structurally and visually scary in certain locations within the Washington Metropolitan area. In real estate investing, always develop your models in terms of supply and demand relative to the existing and future economy within geographical areas.
Things to Keep In Mind With D.C Investments
The high cost of living in DC makes it a great place for investors with deep pockets, but prepare yourself. Working single professionals tend to share houses with several roommates, and short-term contract work means that your renters are likely more short term. However, despite the high prices, there are some great returns for smart and savvy investors.
The Washington Metropolitan solves the demand side of the equation. It is up to you to solve the supply side.