Rentals in 21113>Question Details

Investor 2011, Real Estate Pro in Laurel, MD

Would you buy a 1500 sq ft condo or a 2300 sq ft condo in Odenton, MD for a rental?

Asked by Investor 2011, Laurel, MD Fri May 27, 2011

Looking to buy a rental for an investment in Odenton, MD so would you buy a 1500 sq ft condo or a 2300 sq ft condo? Any reasonsing would be helpful- such as current rental market, potential rents for each, renters demands/needs, demographics, employers vs contractors, families vs non-families, amenities vs no amenities condos, etc. Thank you in advance for your input as they is a great source

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I help investors on a regular basis and have investments as well. Generally I stay away from condos because it's tough to get a positive cash flow with high condo fees and assessments. If you are trying to find something affordable, I would consider a small single family home (like the ones behind the shopping center on 175) or a townhome. Townhomes generally rent very well and very quickly, especially in Piney Orchard. Just be sure that you have positive cash flow and investigate the association for the community to find out how many delinquent accounts they currently have. If there are too many delinquencies, Buyers will have trouble getting financing. Most buyers in that price range are going VA or FHA and too many delinquencies will prevent them from getting their loan. Good luck, if we can help...let us know!
0 votes Thank Flag Link Mon May 30, 2011
I would be more inclined to recommend purchasing a detached home for investment because the financial condition of most condo and HOA associations is very much at risk in this market. If on-time payments aren't coming in from homeowners in these communities, maintenance and repairs will likely be deferred - and the associations may not even be able to meet other financial obligations such as insurance for the common areas. This is a risk that I wouldn't recommend to my clients.

If you do decide on a condo or property in a mandatory HOA, your due diligence should include a careful examination of the financial health of that association, as well as the guidance of your own CPA regarding the impact of your purchase on your financial situation.
0 votes Thank Flag Link Sun May 29, 2011
Renters seem to gravitate to larger dwellings and will rent the biggest they can afford. Detached will rent out faster, then townhomes, and finally condo's are the slowest to rent. A 3 bedroom, 2 bath will always be in demand regardless of the sq footage But the key phrase is" what they can afford" and there is also a very large demand for lower price rentals. In Odenton, your target group should be families. Lower paygrade military who simply want to be close to Ft. Meade; Young couples with kids trying to get out of their apartments into higher quality rentals or families who have lost their homes to forclosure. Don't ignore the last group. Any amenities always seem to be secondary in importance. The important thing for you is which one will provide you the most positive cash flow.
0 votes Thank Flag Link Fri May 27, 2011
I sell Real Estate and also invest in Real Estate. I own and rent about 10 different properties. The first question should be will you have positive cash flow? If yes, and you can't get a better return on your money elsewhere, then you should consider it. If you haven't invested before, consider consulting with another investor who can guide you through the decision making process.
0 votes Thank Flag Link Fri May 27, 2011
I would def look into this...I actually live in Odenton and the market for rentals is very strong, especially with Fort Meade...if you should need any help in regards to financing, please contact me, I would love to speak with you and discuss your options. Christy
0 votes Thank Flag Link Fri May 27, 2011
The current market is pretty strong for rental especially around Odenton. As long as you are priced reasonable well, homes seem to rent in less than a month. For 1500 sq ft, you are looking at about $1500 to $1700 in rental potential. 2300 sq ft will bring you about $2200 to $2400.

You would face a little less competition with the larger apartment, but it is a bigger investment and a bigger risk. In addition to the foreclosure/short sale ratio that Laura references, you will also want to look at the delinquency rate in the condo association. A lot of condos are running very high delinquencies, which makes them much more risky and also harder to get a loan.

Let me know if you need any help running some numbers. I have condo rental property in DC, so I understand some of the dynamics that may factor in.
0 votes Thank Flag Link Fri May 27, 2011
It would all come down to the numbers. Costs in versus return on current market rent. It is a great time to invest as well priced and prepared rentals are receiving multiple applications in days. You need a seasoned pro to show you what areas are moving and help you find the right property for the right price. Anywhere within 20 minutes of Fort Meade is going to be particularly active now with BRAC and Cybercommand folks pouring in daily. But be careful to also check foreclosure/short sale rates in the areas that are of interest to you. Some communities are at or above 30% on that ratio. And some condo communities have not been FHA or VA approved which means if you had to jump out of that investment in the short term you would be risking your hard earned money!

Piney Orchard is always a hot commmodity and much in demand with the Fort Meade crowd.
0 votes Thank Flag Link Fri May 27, 2011
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