I'm thinking of buying a condo in Bethesda as a long-term investment. Probably $300-$400K range

Asked by Jeff, Bethesda, MD Thu Jun 26, 2008

I'm thinking of buying a condo in Bethesda as investment property. Probably $300-$400K range. Good idea? Any recommendations on particular locations or buildings?

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Fernando Her…, Agent, Gaithersburg, MD
Thu Nov 20, 2008
To be brutally honest. . . I will wait a little while and see where the market is headed. An investment isn't a reequirement and your money will be best spent when there is a clearer vision.
The opportunities will still be there.
1 vote
Bruce Lemieux, Agent, Gaithersburg, MD
Thu Jun 26, 2008
Hi Jeff, there's quite a bit available right now. If you are going to rent the condo, make sure that the condo allows rentals. Some (most) have a maximum number of renters/investors allowed in the development, so even though properties are available for purchase, many are unavailable for rental.

Also, as an investment, it's still very tough to purchase and achieve positive or even neutral cash flow (i.e., your mortgage + condo fees + taxes exceed rental income). So, in a negative cash-flow situation, you are counting solely on future appreciation. You have to buy really low, invest money in every month, and then plan to sell in the future and get a return from your total investment. Right now this traditional investment model is still very risky. If you plan to live in this unit initially, then the numbers can be more favorable.

If you want to investigate this further, then find an agent that *really* knows Bethesda condo market to identify the best opportunities (I do some business in the area, but I'm definitely not a Bethesda condo expert). You will make or break your investment return on the purchase. Get it wrong, and you'll pay later.

Good luck -- you are a brave guy!
1 vote
real estate…, , Montgomery County, MD
Thu Jun 26, 2008
Below is a link to every Bethesda condo on the market right now through MRIS. For that price you might have to try a little outside of main Bethesda, like the Parkside condominiums, http://www.choicerealestate.net/choice-listings/details/107/
1 vote
Sam Solovey, Agent, Chevy Chase, MD
Sun Mar 1, 2009

Do you own any other investment properties? My understanding is that new Fannie Mae/Freddie Mac guidelines prevent an investor from holding more than 4 investor loans simulataneously. You will also likely pay a premium on your mortgage rate if you put less than 25% down.

So I think it is a great time to buy in the Bethesda area if you are paying cash or are able to put forth a sizable down payment. Cash investors are getting a far better return on rental income than money markets and CDs. And even those who put a lot down are often cash flow positive and are potentially able to do better than parking the funds in the bank.

Bethesda is great, but I think you will get a bigger bang for your buck if you head just a little south to Chevy Chase. There is a smaller number of rentals, which creates more demand, and the units are larger relative to Bethesda. Take a look at the Friendship Heights neighborhood. There are several buildings that have been very good to investors over the years.

Unless you are planning to retire one day to this investment condo, I'd spend towards the lower end of your range and purchase a one bedroom or even a large studio. There is the most rental demand for one bedrooms and smaller. Your costs go up with larger units, but the increased rent usually does not make up for the increased costs. Not to mention, if there is any down time between rentals, your carrying costs are much more on the larger units. This is not to say that you couldn't do well on a 2 bedroom investment. I just think your cash flow will be better on the one bedrooms.

I started out in real estate as an investor. In fact, I accumulated about a dozen condos in the Bethesda/Chevy Chase area. My best returns were on one bedrooms and large studios. In Friendship Heights and even some buildings in Bethesda, you could purchase a unit like this for under $300K. 2 bedrooms are going to run you in the upper $300s to mid $400s.

The Willoughby has provided great returns for investors over the years
4515 Willard Ave/5500 Friendship Blvd in the 20815 zip code

I'd also look at The Elizabeth at 4601 North Park Ave and across the street is 4620 North Park. The Riviera on East West Hwy in Bethesda is also an option.

Look at buildings walking distance to the metro. Rents are higher and the property will rent faster.

If you have further questions, feel free to contact me.

Sam Solovey
Long & Foster
0 votes
Rcu, Both Buyer And Seller, Bethesda, MD
Tue Dec 30, 2008
Prices are good right now. We are about to put our condo on the market in hopes of finding a slightly larger home while prices and interest rates are low.

Ours is a 3-bedroom, 2 1/2-bath close to NIH, multiple bus lines, and the beltway. Kind of unusual to find a 3-BR in this price range (we are asking $389,900) so we figure even in a slow market we will get interest. If you're still looking and interested, you could contact our agent (Steve Withrow @ Long & Foster, swithrow@longandfoster.com). The website won't be up until Tuesday, Jan. 6.
Web Reference:  http://www.10dudleyct.com
0 votes
Lisa Abrams, Agent, Potomac, MD
Wed Nov 19, 2008
Hi Jeff
Make sure you have your financing in order before you look to purchase investment property.
Most banks want at least 20% down, some require even more. They are looking for reserves of 6 months or more or other investment properties as collateral.
Let me know if you need the names of some excellent lenders in the Bethesda area.
Web Reference:  http://www.LisaAbrams.com
0 votes
Lisa Abrams, Agent, Potomac, MD
Wed Nov 19, 2008
Hi Nicole,
I would love more information on your condo. I have several buyers in the area that are looking for a condo in downtown Bethesda.
Can you give me more information? How much are you asking? Number of Bedrooms, Baths, name of the building, floor location, etc
thank you so much
Lisa Abrams
Web Reference:  http://www.LisaAbrams.com
0 votes
Richard Helb…, , Bethesda, MD
Sat Sep 13, 2008
Dear Jeff,

Simple...do it. One of great areas within the region to invest, own, and hold. There are many good places. Cheers, --RICHARD--
0 votes
Nicole, Home Seller, Bethesda, MD
Tue Sep 9, 2008
I am selling a condo in the heart of bethesda. One bedroom. Pets allowed. Renters allowed. 3 blocks away from Metro. Garage attached and 5 feet away from a gym. Perfect location! I have not put on market yet but will end of this week. If you would like to check it out, please email at nicoleski95@aol.com
0 votes
Dana Scanlon, Agent, Bethesda, MD
Wed Sep 3, 2008
Dear Jeff,
I just completed a study on 3 apartment buildings in Bethesda for another investor looking in your price range. You definitely want to target properties close to metro, shopping and so on, and that allow rentals.
Whether your investment will provide some minimum monthly positive cashflow or just be a headache until you sell it depends on many factors including how large a down payment you have. Right now most lenders are going to want 20% or more for an investment property. The larger your down payment, the lower your monthly cash outlay on mortgage payments will be, and so you might be able to get a small monthly return. But also, you don't mention whether you will self-manage and rent it on your own. If you have a professional do it, there are fees involved (first months' rent upon signing of lease and 6-10% per month of the rent as a management fee). Make sure you decide on this before going forward.
Let me know if you'd like to receive a copy of the study I did on the 3 Bethesda area condos, by emailing me at danascanlon@yahoo.com or calling 301-575-4915.
Web Reference:  http://www.homesbydana.us
0 votes
Cliff, Both Buyer And Seller, North Bethesda, MD
Sun Jul 20, 2008
Think Metro, pets, parking, and condo fee. Think about who rents condos and what they need. I have 2 rental condos in "North Bethesda" ; pets allowed yes, metro is about 15 min walk (bus is closer), parking is plenty and unassigned; style is garden style. I seem to see single parents, young couples, young single professionals, some retirees, and plenty of pet lovers.
0 votes
Sally Bolger, , Potomac, MD
Thu Jun 26, 2008
I have an absolutely wonderful condo listed for sale right in the heart of downtown Bethesda. My customer bought it and has now outgrown it since she startedher home business. It has been completely renovated and has its own washer and dryer. There are several other buildings that are very nice as well. If you would like to contact me, I can be reached at 301-717-2500. Bethesda is my specialty. I look forward to hearing from you.
0 votes
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