From One Investor to Another
I love rental properties. I have owned 3 investment properties so far, all in Northern VA.
1 of those I later moved into, which you can read about here. One day it will become an investment again. The other 2 I currently still rent out.
I can tell you that by the time you read this I will be on my way to planning my next investment property.
I do not have any money in the stock market, I am an “all-in” kind of a guy. And I am committed to real estate investing.
I will be a real estate investor for life, and I want to help you find your next investment property.
So if you are looking for homes for sale now, you can find those below.
If you want to know more about investing, read on.
Potential Investment Properties For Sale In Northern VA
Use the list below to see rental properties that are currently for sale in the Northern VA region.
Every area is also covered with some information about owning a property there and property types.
The homes for sale reflect price ranges typical of good buy and hold investments. For more”hand picked” investments, reach out to me.
- Investment Properties in Sterling, VA
- Investment Properties in Fairfax, VA
- Investment Properties in Arlington, VA
- Investment Properties in Vienna, VA
- Investment Properties in Falls Church, VA
- Investment Properties in Reston, VA
- Investment Properties in McLean, VA
- Investment Properties in Annandale, VA
- Investment Properties in Ashburn, VA
- Investment Properties in Burke, VA
- Investment Properties in Springfield, VA
- Investment Properties in Manassas, VA
- Rental Properties in Alexandria, VA
- Rental Properties in Oakton, VA
Northern Virginia is a prime location to buy and hold rental properties. Washington DC is a short distance away.
There are a large amount of both government jobs and government contractors who live in Virginia and work in DC.
In the last few decades, Northern VA has also become a technology hub. There are many startups in the area as well as established companies.
In 2019, Amazon made Arlington VA its sole east coast headquarters.
Northern VA is also very transient. There is a constant flow of population in and out.
This makes the rental market strong as well as the housing market as a whole.
During times of economic expansion, the properties appreciate strongly.
Many towns in Northern VA also have a history of weathering recessions better than other parts of the country.
Overall, Northern VA is a solid area to start a real estate investment portfolio.
Know Your Stats to Analyze Properties
Whether you do a whole bunch of einstein like calculations, or just some quick and simple ones, you need a way to mathematically judge your rental properties.
This will allow to compare a group of them and see which ones offer the best value.
A Simple Calculation
A “Cap Rate” is often used for commercial properties. But it can be a simple and fast way to see a return on a residential property as well.
Cap Rate= Net operating income / Value of Asset
Net operating income is calculated by finding the total rent revenue for the year, minus the expenses for the year.
Note: principal and interest of loan payments are not included in expenses.
Let’s say you are looking at townhomes in Herndon.
You find a property that has a tenant in place renting for $2,500/month. That gives you $30,000 for the year. You calculate your yearly expenses to be $9,500.
You can buy this property for $350,000.
(30,000 – 9,500) / 350,000 = .058
Cap Rate of this particular property is 5.8
Once you start to run this equation on multiple properties, it will help you see standouts in the area you are looking.
It also helps you to see which areas have the best rental rates compared to the price of buying the property.
Another, quicker equation I heard about originally from Jason Hartman, a national investor.
He looks for properties where the monthly rent equals to 1% of the sales price, single family detached homes with low or no HOA fees.
Keep in mind, that would be a unicorn property in Northern VA and in most areas extremely rare.
The first two properties I bought were .5% and .8% by this calculation. Both needed work, the second needed a lot of work.
And I considered those very solid purchases.
A lot of factors go into choosing an investment property, but knowing how its potential financial performance is important.
There are many ways to succeed as a real estate investor. Investment also always involves risk, so there are also ways to fail.
At the end of the day, you want to become skilled at making investment property decisions. Read up, get some experience and find your own niche (or multiple niches).
For many investors, they are looking for one thing from a property’s performance: positive cash flow immediately upon finding a tenant.
If your property has monthly rental income that exceeds its monthly expenses, congrats…you are cash flow positive.
Let’s say you buy a rental property that rents for $3,500 a month. Your mortgage payment, interest, taxes, community fees, vacancy and maintenance costs come to $3,375.
Your investment has a positive cash flow of $125 per month.
This may sound low, but that number could also increase as rent prices increase and a fixed rate mortgage payment stays the same.
You are also building equity in this situation.
There are many investors that want a good property in an area that is convenient for them and to see that it will make them money every month.
Estimating Vacancy and Maintenance
Vacancy and maintenance costs are important to calculate as you look at investment properties.
These are going to be estimates. But if the property you are buying has a rental history you could ask the seller.
I assume that my investments will be vacant 3 weeks out of the year, or about 6% of the time.
So if my monthly rent will be $2,500, that is $150 per month in vacancy.
Sometimes, you will beat that number if you get a multi year lease or turn it over after tenants very quickly.
Maintenance can be tough to estimate.
If you need a new HVAC unit, and the next month the roof leaks and needs replacing, you will have very high maintenance costs in that year.
But those items tend to last many years, so after that your maintenance costs could remain low for some time.
There is a rule called the “1% rule” that many rental property owners have accepted as the gold standard.
In estimating your maintenance costs, take 1% of the property value, and use that as yearly costs.
I use this rule, but if needed, find your own estimations.
So if your townhome is worth $500,000, then your maintenance costs for the year would be $5,000. Monthly, about $417.
Due Diligence on Your Property
Blanket rules can be useful to analyze properties quickly. However, I always break down a full estimate of a property I am interested in.
Each property is different, in different starting condition, different association fees, rents quickly or slowly, etc.
A full analysis of performance is recommended once you find a property you think you may want to make an investment.
I break down each potential property with pen and paper, that is just how I focus the best.
Benefits of Owning Investment Properties
Why invest in real estate? You may think it is a good idea but are not sure why. Here are some of the benefits of becoming a landlord.
Cash is king. I think of rental income as any other income, but with a really good return on the hours I put in.
Managing a property takes a lot less time than going to work for 40 hours a week.
Over a long period of time with multiple properties you can create wealth for yourself and loved ones.
This is my favorite aspect of owning properties. This applies if you have a mortgage on the property.
When you own a piece of real estate, every month that you make a payment towards the mortgage you are paying off a portion of the principle.
For a rental property, the tenants will be covering your payment to the mortgage. You will get a rent check, and that check should cover your mortgage payment (hopefully).
The monthly equity you build will also increase over time as your early mortgage payments go more towards interest (they are “front-loaded” with interest). Later payments pay off more of your principal.
This is a large part of what makes long term real estate investing investing a great strategy.
Any market goes up and goes down.
But over a long enough period of time real estate has a track record of appreciating.
From 2011-2021, the Fairfax County median sales price went up about 56%.
Appreciation is a nice side bonus for long term investment properties in Northern VA. With the major benefit being rental income.
I keep close track of all my rental expenses and leave it up to my accountant to figure out the best way to write offs.
And since I am not a CPA and the tax code changes, I will not get into the depths of these benefits.
The IRS themselves have an article on deductions.
A good accountant is almost certainly a better source in your favor.
Types of Homes: Which is Best For Investment Properties?
What type of property should you buy? Each type of home has its advantages and drawbacks.
These three types dominate the Northern VA residential real estate market. There are a couple of other types that are rare.
If you run into something that you are unfamiliar with, let me know I will give you a rundown.
Appreciation stats I compiled using Arlington County, Fairfax County, Loudon County, Falls Church City, Prince William County, Manassas City, Alexandria City and Fairfax City.
This gives a pretty wide area that I would say encompasses Northern VA.
These figures come from Bright MLS data. Average home value increase is over 2011-2021, based on average final sales price in the above counties/cities.
|Average Yearly Home Value Increase||6.04%|
|Price to Purchase Property||Medium|
My first rental property was a townhome. I think they make great investments.
For starters they appreciate well. They are a nice size for the price, and generally generate good interest as a rental.
Townhomes also give a good option to potential tenants because of the space.
They are attractive to potential renters because often they have a basement, a small yard and more square footage than a condo.
|Average Yearly Home Value Increase**||4.50%|
|Price to Purchase Property||Low|
The biggest advantage of a condo is lower maintenance costs. In many communities however, this is offset by the higher monthly fees.
But having less repairs to arrange will save you time. Condos are very popular as rental units because they are also easy to find a tenant for. Many resemble an apartment, a multi level building.
But some have more than one level, and other condos are very similar in style to a townhome (but you still own and maintain inside the walls for the most part).
There are some communities where the fees are very high for one reason or another. Make sure to be aware and include these numbers in your research.
Certain condo buildings have rental restrictions written into their bylaws. Make sure to check on this before you write your offer.
If that info is not available before the offer, study the condo docs quickly and thoroughly to make sure there are no restrictions once under contract.
Detached Single Family Homes
|Average Yearly Home Value Increase**||7.03%|
|Price to Purchase Property||Medium/High|
|Monthly Fees||Very Low/None|
The single family detached home can also make a good investment.
They have the highest maintenance cost, as you are also maintaining a yard. But in many areas of Northern VA single family homes are the most sought after.
Northern VA has several single family home communities that are prime for investment properties.
Keep in mind the cost to purchase vs. the rental income. Larger, more expensive homes tend to have lower rental performance.
Specific Areas for Investment Properties
Below are properties for sale in each area of Northern VA. If you want to find properties in more towns not listed, use my home search tool.
For each area I include how long houses are on the market before they get a lease. This does not include vacancy time while you make any repairs between tenants.
Investment Properties For Sale
These properties are currently on the market. Browse through and you can see which ones would be the best investment for your situation.
Investment Properties in Sterling, VA
Sterling rental properties have become very popular.
The silver line metro brought in new possibilities for commuters and more companies are locating their offices closeby.
Sterling has a lot of smaller townhomes and condos that make great rentals. The single family homes also have potential.
|Sterling Rental Analysis||Stats (2021)|
|Median Days to Rent||18|
|Median Rent Price||$2,463|
Investment Properties in Fairfax, VA
Fairfax includes both Fairfax City and a small portion in the larger Fairfax County.
The area has a good balance of townhomes and single family homes. There are not as many condos, but there are a few buildings.
Most of the condos are in the Fair Lakes area.
George Mason University attracts students to the area who are looking to rent. Properties walkable to Mason are especially attractive.
|Fairfax Rental Analysis||Stats (2021)|
|Median Days to Rent||19|
|Median Rent Price||$2,775|
Investment Properties in Arlington, VA
Arlington is full of rental potential. It is easily accessible to DC, and has a ton of condos for sale that can be quickly rented.
Arlington also has a fair amount of older single family homes that have potential to be added to your portfolio.
The price tag is relatively high in Arlington. So run the numbers carefully.
However many investors have made a good living being landlords in the area because of good appreciation and rising rents.
|Arlington Rental Analysis||Stats (2021)|
|Median Days to Rent||25|
|Median Rent Price||$2,900|
Investment Properties in Vienna, VA
Vienna has a couple of distinct areas. Off of Park Street is the Town of Vienna, where there are lots of large single family luxury homes, and some older small homes.
Closer to Tysons, Vienna has some condo complexes that make great rentals.
Unless it is your chosen niche and you have experience, I stay away from luxury homes as rentals.
You may be able to find an older home with some good income potential, but more and more they are disappearing to build larger homes.
Vienna has a number of townhome communities as well.
|Vienna Rental Analysis||Stats (2021)|
|Median Days to Rent||16|
|Median Rent Price||$3,163|
Investment Properties in Falls Church, VA
Falls Church is another Northern VA town with 2 jurisdictions. The City of Falls Church is relatively expensive, with lots of new construction homes being built.
There are only a couple of condo complexes and townhome communities in the City of Falls Church.
Falls Church on the Fairfax County side has a number of townhomes, older homes and condos that could be a match.
|Falls Church Rental Analysis||Stats (2021)|
|Median Days To Rent||20|
|Median Rent Price||$2,890|
Investment Properties in Reston, VA
The investment prospects in Reston are plentiful.
First of all, Reston has great quality of life for tenants. It has lots of activities, green space and amenities that make it sought after.
Secondly, there has been a boom in jobs in the area as technology companies have moved into Northern VA.
And finally, there are a ton of townhomes and condos. Many are older and the price tag relative to buying closer in to DC has historically shown value as investment.
And two metro stops definitely help.
|Reston Rental Analysis||Stats (2021)|
|Median Days to Rent||15|
|Median Rent Price||$2,400|
Investment Properties in McLean, VA
McLean is known best for its large price tags and huge, custom built homes.
If you are a new investor, I usually recommend starting elsewhere.
However, high net worth net individuals with a good knowledge of the McLean market do have a good portfolio of rental homes in the area.
And hey, a good deal be found anywhere so keep your mind open.
McLean also has some condo complexes that have a history of rental performance.
|McLean Rental Analysis||Stats (2021)|
|Median Days to Rent||23|
|Median Rent Price||3400|
Investment Properties in Annandale, VA
Annandale is made up of suburbs east of Fairfax.
One of the big advantages of homes in Annandale is large portion of it is between highway 495 and DC. Locally, this is known as being “inside the beltway”
The location combined with some good value relative to its neighbors makes this town a good place to watch for rentals.
|Annandale Rental Analysis||Stats (2021)|
|Median Days to Rent||17|
|Median Rent Price||$2,898|
Investment Properties in Ashburn, VA
Ashburn has been recently developed compared to the other towns we are covering.
New construction homes really began to take off in the early 2000s and builders have built plenty of condos, townhomes and single family homes in the area.
As Loudon continues to develop Ashburn is an attractive area to buy investment homes.
The silver line also reaches this area and there are no shortage of companies coming to the area. Amazon operates several data centers in Ashburn.
|Ashburn Rental Analysis||Stats (2021)|
|Median Days to Rent||8|
|Median Rent Price||$2,600|
Investment Properties in Burke, VA
Burke is an established community within Fairfax County.
Burke does has single family homes and condos.
But the signature of Burke from an investment perspective are the townhomes.
The area is home to large communities of townhomes that are sought after have historically been solid rental properties.
|Burke Rental Analysis||Stats (2021)|
|Median Days to Rent||13|
|Median Rent Price||$2,500|
Investment Properties in Springfield, VA
Springfield covers a large geographical area, with a portion inside the beltway, another close to Burke and another runs south down highway 95.
On the south side of Springfield are a large amount of properties that are close to Fort Belvoir, a military base. This make the area attractive for investment properties.
|Springfield Rental Analysis||Stats (2021)|
|Median Days to Rent||12|
|Median Rent Price||$2,700|
Investment Properties in Manassas, VA
Manassas is full of investment potential. It has historically relatively lower entry price to acquire a property and also has a good history of low vacancy rates.
Manassas is pretty far west from DC with no metro, and during the financial crisis in 2008 took a pretty large hit to home values (however those prices were greatly inflated).
But, the investment income for many landlords outweighs any risk of being further out.
|Manassas Rental Analysis||Stats (2021)|
|Median Days to Rent||11|
|Median Rent Price||$2,400|
Rental Properties in Alexandria, VA
Alexandria covers a large area. It also has two jurisdictions, the city of Alexandria and Alexandria within Fairfax County.
Old Town is renowned for its waterfront properties, walkable historic districts and charming restaurants. This area also carries a large price tag, unless you can find an old row home and do considerable repairs.
South Alexandria is a different animal. It is more suburban in nature with strip malls and town centers and also is close to Fort Belvoir.
There can be opportunity in both areas in the right market.
|Alexandria Rental Analysis||Stats (2021)|
|Median Days to Rent||17|
|Median Rent Price||$2,800|
Rental Properties in Oakton, VA
Oakton is located just north of route 66, a main east and west highway running through Northern VA to DC.
The single family homes are relatively expensive. But there is also a section of Oakton that has some condos built in the 1970s and 80s.
They are very accessible to the highway and a short drive to the orange line metro station.
|Oakton Rental Analysis||Stats (2021)|
|Median Days to Rent||16|
|Median Rent Price||$2,800|
Financing an Investment Property
A majority of investment properties involve a loan.
You have options for financing. Depending on your goals and your situation, you may use one or more of these on different properties.
A conventional mortgage can be obtained through a bank or mortgage broker.
They are not guaranteed by any kind of government agencies.
These loans come with down payment requirements, usually 20% down.
It can be difficult to get more than 4 conventional loans. But it is possible. Here is a great article on that topic.
These loans have favorable rates relative to some of the other options.
Hard money loans are good if you are unable to get a conventional loan.
They also make it easy to cover the cost of updating if you have to make repairs to the property.
Hard money loans are popular because they will loan on how strong the property’s financial return is and not your personal financial records.
Washington Capital Partners is a very good local hard money lender in Northern VA.
Rates tend to be higher, but if you cannot get a different type of loan they have loan types that are specifically for investment properties.
My first investment property I got a private note from the person I bought the house from (aka seller financing.)
You can obtain a loan from anyone who is willing to put up the cash, and work out any terms you want as far as interest rate, repayment period, etc.
The contract, or “note”, is signed and filed with the local court as a lien on the property. You make payments to the individual.
Many investors choose to buy investment property in Northern VA as an Limited Liability Company (LLC).
A company that buys real estate though cannot get any loan type. Conventional loans are off the table.
A commercial loan (or hard money) can be a good option.
I have used multiple commercial loans to purchase investment properties. It is also good for construction loans, where you finance the renovations needed.
Paying cash can be a good option if you have the means.
You can often negotiate a better deal using cash, and can also close on your property much more quickly.
In markets where interest rates are low many investors will pay cash and then refinance to take get cash back out of the property and buy another property.
Turning Your Primary Residence Into a Rental Property
I have helped many clients turn their home into a rental property.
If you are buying a new home, you may want to think about becoming a landlord for your current home.
Your first home may very well make a good investment property that can help you build long term wealth.
Even if you have a low down payment loan and you bought the home as a primary you can still turn it into an investment later if you move.
Finding a Tenant
Once you have purchased your property, it is time to find a tenant.
A good property management company can do this, or you can do this on your own.
There are many websites where you can put up your listing, and many will syndicate to other sites around the web.
Fair Housing Laws
If you are finding a tenant for your own property, know these laws.
They should go without saying, but read up on them anyway.
Virginia Residential Landlord Tenant Act
Even if you hire a property manager to rent and manage your investment homes, you will want to familiarize yourself with this code.
Yes it is long. Yes it may put you to sleep. But you will definitely want to know the rules of what you can and cannot do when dealing with tenants.
Short Term Rentals
The poster child for short term rentals is Airbnb. The internet has offered landlords the opportunity to rent their home by the night, week or month.
However each jurisdiction has begun to make laws around short term rentals. Some have more strict restrictions than others.
Short term rentals are defined in most areas as less than 30 days. Short term rentals can give good returns if done properly (and you are able to find an area that allows them).
Just make sure that you know the rules going in. They are likely to change over time as well.
Signing A Lease
Most landlords have a signed lease. If you do not, generally it is understood that the lease is month to month and still goes by Virginia Residential Landlord Tenant Act.
The lease will spell out the length of stay, monthly rent and also all the other terms.
Read it carefully and make sure to follow it. For example, most leases require notice to be given by landlord before going to the property.
Once you have a tenant in place, you will need to manage the property. This can be done by the owner or by a licensed property manager.
This involves collecting rent in accordance with the lease, arranging for any repairs and dealing with communication from the tenants.
Managing Your Property Yourself
Many landlords manage their own properties.
There is some work involved especially on your first property as you learn the laws and find your preferred contractors.
But it is entirely possible to manage them, and the hours you put in are worth learning about your rental business.
You can also find a property manager to take care of everything for you. The advantage here is that they know the laws and best practices.
They also will make your investment property more passive for you.
In Northern VA most professionals will manage investment properties for a percentage of the monthly rent. But other terms are possible as well.
The Best Investment Properties in Northern VA
Ready to get started? If you want to know what my picks are for the best investment properties currently for sale in the Northern VA area, fill out the form below.
Have other investment property questions? Let me know how I can help.
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