There are a few factors that go into evaluating a good investment:
- cash flow
- price appreciation
- tax benefits
In the Northern Virginia area properties that have a break even cash flow have been hard to find due to high housing prices. With the recent mortgage problems and foreclosures however there is more and more activity from buy-and-hold investors in this region. As prices come down, one can find properties where the cash flow numbers work on a month to month basis - especially if you're open to buying below market with bank owned, short sales, etc.
As for appreciation, Northern Virginia and Reston in particular has been and will continue to be strong because of the proximity to DC and access to jobs in the Dulles Corridor. The Dulles Metrorail expansion will also be a major appreciation benefit to long term investors.
Of course, the tax benefits will vary depending on the individuals situation (tax bracket, employment status, 1031 exchanges, etc.). Typically, the government tends to give a lot of tax advantages to those investing in real estate as compared to other investment vehicles such as stocks.
If your price range allowed it, I would recommend that you look at townhouses as well as condos. There are some townhouses in the Reston/Herndon area that are below 200k and the cash flow numbers look good given the strong rental market. Buying a townhouse as opposed to a condo may also insulate you from some of the price volatility that tends to come with the condo market (a factor once you're looking to sell).
Hope this helps.
The higher priced condos in Reston generally have high condo fees, and--it could be argued--were pretty expensive to begin with.
Your problem also would be cash flow. The Shadowood units are getting to the point where they almost cash flow--buy one for $150,000 and rent it out for $1,100. But watch out for negative cash flow, especially on a long-term hold.
If you really anticipate holding it for 10 years, can bear to watch prices decline another 10%-30%, then you'll probably come out OK. Real estate, of course, is cyclical, and prices will rebound somewhat...probably in a couple of years. But I think there are far, far better places to buy in Northern Virginia. And I'd suggest a single family home or at least a townhouse.
Not only is it a good time but the rental market is strong especially in Reston. There isn't enough inventory for qualified renters. Renters really don't care for apartments they are willing to pay more for some type of a yard and square footage like a townhome or prefer a condo over a an apartment.
If you need expert guidence please contact me as I would be happy to assist you in your investment purchase and locate a
I've purchased 11 properties in the last two years in the Reston Area. I think it's a great time to purchase real estate BUT you need to know your numbers. A great book for you to read is the Millionaire Real Estate Investor. I also run a Reston based investment group that can help you get a lot of answers. Follow the link below....membership is FREE.
So, in essence, waiting till next year mid or even late might get you better bargains.
The RealtyGeeks Team-we care
Historically condos have been more likely to decline, so a townhouse or SFH may have a lower downside, although the higher purchase price makes it harder to make the numbers work on a monthly basis.
Holding a condo for 10 years (one would hope) that the Metro extention should be well on its way to completion; thus adding to the resale value.
Also, by the spring/summer, the rental market should be better for you as a landlord (aka market rental rates will have gone up). Currently, market rental rates are really low which is great for renters, but not for landlords/investors. That will start changing soon though.
But that's just my humble opinion and I don't have a crystal ball.