Real Estate Investing in Maryland: What You Need to Know

Maryland is one of the most densely populated states in the US, much of it due to the proximity to Washington DC and the vast number of government institutions, military, and defense operations within its boundaries and nearby. Over 460,000 people work for the government in the state of Maryland, and probably that many more commute out of state to work in others, elsewhere. Let’s see how all those government workers affect the real estate investment market in Maryland.

Maryland has always been historically significant to governance and business

As one of the thirteen original colonies, Maryland was founded by George Calvert, a Catholic convert who hoped to provide a safe haven for Catholics and others avoiding religious prosecution by the British. The Maryland Assembly passed “An Act Concerning Religion” in 1649, making it illegal to disparage a fellow Marylander based on their religious practices. It’s agricultural base and central location played key roles with heavy involvement in both the Revolutionary (the Maryland Line and the Maryland 400) and Civil Wars (both Antietam and Sharpsburg are here). Heavy industrialization and home to one of the busiest commercial ports in the nation, Maryland saw massive immigration from Europe, particularly, in the 19^thcentury. It is among the most densely populated states in the U.S. even though one of the smallest.

Maryland has always been front and center in the development and running of the U.S. government in one form or another, then and now. Roughly 460,000 people go to work every day in the state of Maryland for the federal or state governments, or the military. A lot of people do not know that Annapolis, Maryland, was the first capital of the United States, through the 17^thcentury, and is the capital of the state. The United States Naval Academy, which is what Annapolis is probably best known for now, was established in 1845. No less than 33 key federal facilities are home based in Maryland, including the Social Security Administration, NSA, DOE, EPA, FDA and Census Bureau.

Maryland is strategically located real estate

Maryland has some advantages and is actually sought after in some industries for location. Centrally located between the Northeast and South on the eastern seaboard, Maryland is a good transportation hub. For over 200 years a series of canals provided connections between major rivers heading west, some still in use. They also have a good centralized public transport system that makes it easier to get around to work and school. Some very predominant educational institutions are in Maryland, including Annapolis and John Hopkins University, as well as the John Hopkins Medical Center, Walter Reed Hospital, and the National Military Medical Center, or Bethesda as it is known.

Many people do not know that a lot of Maryland is not just continuous city. 43% of Maryland is still forested and leaf peeper season is a big tourism draw.  The state also has over 4,000 miles of shoreline, much of it around the Chesapeake Bay estuary, and most of it high-ticket real estate. A peculiarity for the state, though, is no natural lakes. Since Maryland was not a glaciated area, there are none. Being on the eastern side of the Appalachian watershed, however, there are multiple rivers and creeks, and Maryland is known for many beautiful waterfalls.

What else is pushing Maryland’s economy?

Agriculture is still very important in the state. Originally cultivating primarily tobacco, important crops now include greenhouse and nursery stock, corn, soybeans, grains, tomatoes, poultry, shellfish and famous Maryland blue crabs. With rich river delta alluvial areas, crops grow well with high yields, and those agriculture and aquaculture crops help feed the eastern seaboard. The varied terrain and climatic conditions are furthered by the north-south transverse of both the Blue Ridge and Appalachian Mountains in the state’s western areas. Maryland is often referred to as “America in the Miniature” due to having nearly every U.S. weather and topography represented within its boundaries, and you can see everything from subtropical palm trees growing in the southeast to New England cooler climate hardwood forests in the mountainous west.

What Is Driving the Maryland Real Estate Investment Market?

Maryland is an anomaly when compared to other places for income and who spends what on real estate.  One of the richest per capita income states in the U.S., Maryland has the highest median income of any in the U.S.  It is also the fourth largest by number of employees that work for government. The primary industries besides government, military, aerospace and defense are cyber-security, medical and biosciences, and other technologies. There are over 60 federal facilities alone in Maryland, and twice as many laboratories that work for government. Part of this is due to proximity to Washington D.C., and the central location on the eastern seaboard.

Is It Worth the Traffic and Commute to Move to Maryland?

Due to all this “landed industry”, unemployment is lower than nearly anywhere in the U.S., but it also has created a real estate shortage, mostly in residential and rentals. It also means that many, many people commute in Maryland, up to 900,000 daily into Baltimore alone, and an untold number to Arlington, VA, Washington, DC, and the surrounding areas. It is kind of amusing that the state nickname for Maryland is “The Free State”. No, not free – it is being paid for with your tax dollars.

Sadly that is a not a joke, either. Maryland is one of the highest states in the nation on property taxes, state income tax, and sales and other taxes. You may be working for the government at one of those high paying jobs, but they are going to get part of it back. Those facts kind of offset that Maryland real estate has averaged just over 5% a year in valuation increase for the past several. Property taxes can off-set that value increase fairly quickly.

What about Real Estate Investing in the Suburbs?

Since it tends to be a lot cheaper to live in Maryland and commute to D.C. rather than live in D.C., most people live in the suburbs. This fact helped keep Maryland property prices a lot more stable during the recession starting in 2004, and most areas did not experience double-digit drops like most of the rest of the country suffered.

Rental real estate is probably the safest bet for investing in Maryland, especially in the suburbs. One reason is people who work for the government never truly think they have a job for life, and do not assume they are “safe” in their position. Therefore, many do not buy a permanent home that they might get saddled with. This is coupled with the fact that residential property in Maryland is expensive, period with the average home value at $282,500 and median listing at $320,000. The high cost of buying a place, along with the high property taxes, keeps many people from being able to afford a place of their own. About 30% of the people in Maryland rent for those reasons alone.

What Kind of Property is the Best Real Estate Investment in Maryland?

Maryland also has a very high default and foreclosure rate on home mortgages, due to the excessive prices of property. Last year it ran around 14.6% of all mortgages were in arrears or default. That means that property can be had for usually marginally below market value, and turning it into rental property is an option. You do have to figure in the taxes and any repairs and upkeep, though, to make sure that the rental rate will be sufficient to offset those costs.  The default rate explains why the average home selling price is only $260,400, which is a sizeable drop from the median listing – or want or what I think it ought to be worth – price.

It can be very challenging, though, to locate good buys on rental property in Maryland, particularly in or near major cities. Part of the reason is you truly need to be local and there to even get wind of a good buy. Maryland real estate bargains are hovered over like vultures hunting food by the real estate investment associations, and more so, the direct investors.  With rent averages around $1750 a month, it is a big bite out of a lot of people’s budgets. Rental law and regulation has been pretty much non-existent throughout most of Maryland history, and eviction was easily enforced. Just in the last year “anti-landlord” laws have started to be passed to provide some arbitration, lead time, and fairness to tenets regarding landlord access to rental units and eviction processes. Because of the history of shady landlord practices, there tends to be mutual protection among them and agents that support the system.

It is important to research the average valuation increases, as well as employment rates, very well, area by area if you are looking to invest in Maryland real estate. The valuation increases vary quite a bit between cities, and many hover around 2%. 2% is not going to pay the increases in property taxes for assessment when it turns into rental property. Baltimore, while having a massive amount of computer traffic and workers, has shown slow job growth and slower yet economic growth for several years running. Some outlying cities like Fredericksburg are doing a bit better, mostly due to its being a more livable and pleasant living situation. Some like Rockville are growing very slowly, but at least steady, with 1% increases in job growth or less, and 2% or less in house values.

Due diligence for ordinances, rules, about renting out is critical

Neighborhoods, or developments turned into high end, self-contained mini-towns are very common in the areas surrounding the major cities, and on the waterfront. Prices tend to be high, and checking regulations and association fees is tantamount if you are buying a place that needs remodeled. It is very important to see if you can even rent the property in the location, and note that Maryland municipalities are passing ordinances blocking additional licensing for short term rentals as we speak. This will especially affect markets around medical, educational, and federal facilities where workers, patients, or students often come for limited time periods and need a place to stay.

Overall, real estate, if you have deep pockets, can be had in Maryland for rentals, but the returns are often offset by taxation.  And I am curious, are we talking real estate investment increases here, or savings account yields? Yikes. Any hiccup will wipe out 1-2% increases. I like my lead gen properties that regularly have an 80-90% return on investment into my pocket – unlike Maryland real estate at 1-2%. Check out how I do it here https://www.bestrealestatedirectory.com/lead-gen/

There is a better way to invest in real estate in Maryland – do it digitally

It just seems so much simpler to me to earn my money first so I know I can afford to do what I want to in investing, rather than chancing it with properties that I have a lot out on, and then have to put more into, to get a little back. While I know there is a return on most real estate at some point, there is also a lot of volatility depending on the economic situation. No one mentions what happened during the government shut-down. How many renters did not pay their rent in those areas that rely on the government as a primary employer, often to everyone in the household?

It also never ceases to bother me when I see the investment firms stacking up ads and articles that all are very contradictory to the information from those entities for whom honestly is integral to survival when it comes to data and numbers. A few points here or there I do not worry over, but when the difference is 300-400% or more, someone is not telling the truth.  The REIAs in Maryland would like you to believe that ROI on real estate runs 20% or more. I could not substantiate that anywhere. Call me cautious, but I lean towards those who have to keep their nose clean. Most of the searches come up with real estate investment firms, Maryland or Baltimore REIA, and the Baltimore housing bubble.  Bubbles burst, and it is never a good thing.

That is why I like my lead gen business so much. It is straight forward. I create websites for businesses to bring them in more customers who are already trying to find their services or products. It is simple as that. Warm leads. It is amazing how well things work when you are offering what people already are hunting and need.  My returns for the entire time I have been in this business have averaged 80-90% return on investment, an extremely high rate of return. Let me explain how I got here to start with.

When I graduated from college, I immediately started work in corporate USA at the $35k/mo I thought was my dream job, at least for getting ahead. Little did I know, and man was I naive. I started out ok, but very quickly realized there was no surviving in the big city I lived in on that salary, and I was frugal, too. I had to be to pay my bills on my own and prove I could do it. I was working my butt off on salary, too, and quickly learned that it was not one shred about my success, but making money for someone else. I knew I had to find another way to make some extra money to start saving.

The first thing that popped up that looked lucrative was multi-level marketing. They had been around forever, and I thought meh, what could happen. Well, what happened was lots of expensive buy in, lots of inventory, and LOTS of competition. I very soon had a lot more in them than I ever got out, was cramming meetings between trying to do sales and in the process started loosing friends and family would not return phone calls. It also did not take very long to figure out that it was like my corporate job, another way for the “guy up there” to be making the bucks off my labor. Had to find something else.

After a lot of research I decided that drop shipping looked good, and I set it all up, and invested a lot into inventory. I admit, I did make a little, better than the MLM’s, and my friends and family were speaking to me again. But – I had zero time to spend with them. Every minute after the 40+ grind I was boxing, shipping, handling orders, returns, you name it. My apartment became packed with stuff. I was exhausted, not very far ahead, and living in a warehouse. That was not how I wanted to live, even if I was making a little money.  I needed to keep looking.

By now I had really become frustrated with the day job grind and facing more at home. I stole every minute I could to hunt for another way to make a decent living and be my own boss, make my own mistakes and be responsible for my own success. One night really, really late I was surfing the business blogs I watched and an article caught my eye about a young guy not much older than me that had figured out how little business owners knew about generating customers off the internet. That got my attention, because I already knew how little people knew about internet marketing. I read with more interest, and learned this guy, Dan, was writing simple websites for people to get hooked up with the business owners on a referral to find what they were already searching for. That made a lot of sense to me. I made some notes, and the next night started to dig up what I could learn about it and Dan through research searches.

I found out Dan was for real and was making some really good money. I was impressed that he was working the business himself every day, and was obviously a hard worker and a family guy. That appealed to my background, as I was brought up to respect that. There was a link https://www.bestrealestatedirectory.com/lead-gen/

to get more info about Dan and the training program he had put together to help people learn how to do what he was doing.  He had also created kind of a support work group and tech help, which I thought was pretty cool. The idea of being my own boss and having people who were like-minded around me instead of feeding off me was really appealing. I decided to click the link and made an appointment for a call to ask questions. There were some videos and training information on the link, too, that made me even more curious.

When Dan got ahold of me and explained what he was doing, and how reasonable the training was, I did not hesitate. I signed up for the lessons and started to learn. The first thing I did was build this site, which took a whole grand total of about six hours –

 

 

I followed the easy to understand lessons and did exactly what Dan suggested and called around to see if anyone in the niche was interested in the leads that had started to come in almost immediately (that had surprised me enough!). Sure enough, right away I found a customer who agreed to pay me $750/mo for the leads. I was surprised at how easy it was, but mostly how excited the customer was to get the leads for extra work. The same customer is with me to this day, five years later, paying me $750/mo. My expenses are really minimal, and to date I have cleared $36,400 in profit from this one six hour build that I hardly ever have to even look at.

Wow. Could you use an extra $36,400 in your pocket after expenses? I know I sure could back then, and it is still good money.

Well, I was hooked, so I worked and built and worked and studied and called customers. I was still at the 40+ hrs/wk corporate job, which by now I knew was never going to be the future I wanted. In five months I was able to turn in my resignation and walk out the last time.

I never looked back.

Five years later, I just turned 30. I will be doing over 7 figures this year in my lead gen business. I keep building, growing, and helping businesses get new customers and grow. I am my own boss. I travel when I want, work when I want. And yes, it was work at first. But it sure beats working for someone else who makes all the profit off your labor, I can tell you that.

Now, when I want to invest in a piece of property, a business, I have it in the bank. I do not have to sweat bullets if the government has a shut down or the market drops. I know I can afford to meet the mortgage payment, if I did not just pay cash for the property to start with. Someone else can manage them, do the repairs. I do not have to spend weekends hauling drywall, unstopping plumbing, or worrying about the renter’s dog tearing up the whole place. And it has also let me look at other places to diversify my profits and income besides the volatile real estate market.

If you are tired of making money for someone else, click this link https://www.bestrealestatedirectory.com/lead-gen/

If you are ready to work a little and be your own boss, make your own money, click this linkhttps://www.bestrealestatedirectory.com/lead-gen/

No one will hassle you. Your information is private. We won’t call you back. I just know that there is way too much business out there across the globe that I will never, ever be able to tap into to help businesses grow, and it is my way of giving back for what Dan did to help me become my own, successful, financially stable and well off boss at the age of 30.

The internet is the future, and the future is now.

Grab on and make it your ride to freedom.