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Why Rental Properties Are A Great Investment In Maryland

You know that investing in rental properties is a great idea. But what's puzzling you is where you should invest your hard-earned money. True, there are loads of options, but few compare to Maryland.

Maryland has a huge population packed in 10,460 sq. mi. which contributes to diversity and opportunity – two of its greatest qualities. Moreover, proximity to America's capital (Washington DC) boosts its cultural, economic, and financial spheres.

Simply put, Maryland real estate investment is a great place to start for anyone looking to secure their future. But if these qualities haven't convinced you yet, we've done some research, and here are a couple more reasons why you should look deeper into Maryland's rental property investments.

Investment Benefits

Tax Benefits

Taxes are a determining factor in real estate investment. You haven't truly calculated the profitability of the rental investment until you've factored in taxes. The good news is that in 2020 Maryland expanded the scope of recordation tax exemption to include any entity or person getting investment property.

Under the new law, you can refinance your mortgage with $0 state recordation tax. Depending on the property you purchase and its value, the exemption will cut down the closing costs by 50% or more if the paperwork is done well.

Geographic Location

Maryland has a lot of jobs in-state. However, many Southern Marylanders commute to Washington D.C. since it's cheaper than buying property in the suburb of Washington D.C. The stability of Washington DC's economy helps to insulate Maryland's real estate from insane housing fluctuations as it was during the Great Recession in 2008.

Moreover, rental real estate is popular since most Marylanders have contract-based jobs or jobs that need a lot of travelling and/relocation.

Affordability

What's the point of knowing the most profitable real estate market if you can't afford to invest in it? Luckily, Maryland real estate market, isn't like this. Instead, it's highly affordable with a median home value of $224,950. So compared to other markets like Phoenix, Chicago, and Dallas, Maryland is affordable.

As such, property investment is a great choice for real estate beginners who don't have access to mounds of cash. Additionally, financing cheaper rental investments is easier.

High Rates of Foreclosure

This may sound sad but give it an ear. Maryland still has one of the highest foreclosure rates in the U.S. For those after owning a rental at a fair price, invest in Maryland. Moreover, people who live in Maryland and who've recently had their property foreclosed turn to rentals to at least have a place to live. As such, the rental market is expected to remain in demand for several years.

Diversify your Income

If you want to build an empire, save more and do more, you have to increase and diversify your income streams. Multiple income streams come in handy when you lose your job or when job growth isn't an option. By acquiring investment properties in Maryland, you unlock a new source of passive income. Not only do you earn money from property in Maryland, but you also have access to loans that'll help you make your investment property journey fast and easier.

Strong Rental Market

High property value and property taxes make becoming a property owner for many residents and not have to pay rent an unachievable dream. The high cost of living doesn't help their situation. This fact explains why 30% of the residents are tenants and why the average rent prices are higher than the nation's average.

Save for Retirement

Nowadays it's difficult to save from your salary or business. With ever-increasing expenditure, it's even more difficult to build long term savings; you need something stable.

If you get into profitable Maryland real estate investing, then you don't have to rely on your salary to save for retirement. Even better, since rental property and median home value increase over time, becoming a landlord is a great long-term wealth option. Consequently, this means more money for you once retired especially if you have a great property management company like Next Level Rentals by your side.

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Is Maryland a good place to invest in real estate?

Yes, it is, courtesy of its population growth, job hotspots, and pockets of revitalization. Also, more than half of its residents live in rentals which makes it one of the best cities for real estate investors.

Why is real estate often a great investment?

Real estate improves the risk-return profile of a portfolio, offering cut-throat risk-adjustment returns. Generally, compared to equity and bonds, the real estate market has low volatility and offers better peace of mind.

Should I buy a rental property in 2021?

Yes. A good rental investment should have a high income. But aside from Cash flow, it should have a positive cash flow. Luckily, just like there are methods of increasing income, you can find creative ways to reduce expenses and increase returns.

How much profit should you make from a rental property?

Aggressive and seasoned investors may be looking at 10-12% Return on investment from rental properties. However, the average investor should expect around 7%.

Conclusion

Purchasing rental investment property requires a lot of foresight and thought to be profitable. The best way to ensure this happens for you is to work with an experienced realtor who understands Maryland's market. And when you take the plunge, it's even more important to have an experienced rental property management company like Next Level Rentals working for you and your investment.