Property is renowned for strengthening investment portfolios and generating reliable passive income. Maryland’s busting economy and diverse demographics make it a great state for investors.
On its Eastern Shore, Maryland features sun-swept beaches that swell with a seasonal crowd. Along its western panhandle, the foothills of the Appalachian mountains are the perfect year-round natural oasis. And in central Maryland, a wealth of businesses, universities, and healthcare institutions create a high-demand housing market ideal for investors.
The area you choose for your investment properties in Maryland will depend on your preferred investment strategy. Here are our insights into the 4 best locations across the state for property investors.
Eastern Shore
PROS
The eastern shore is praised for its vast collection of vacation destinations, beautiful beaches, and quaint waterfront towns. For this reason, the Eastern Shore is a great location for vacation rental investments. Every summer, millions of tourists make their way to the ocean, and rental properties in the area become a hot seasonal commodity.
The main beach destination in Maryland is Ocean City, known for its expansive boardwalk, bustling nightlife, and variety of family attractions. Rental properties in OCMD can gross large profits for investors, especially during the summer months.
However, other destinations on the Eastern Shore are also attractive for vacation rental investors. The historic bayside town of St. Michaels attracts weddings, bachelorette trips, and romantic getaways thanks to its quaint downtown.
The buy-in price for Ocean City may be discouraging to some investors. This has made nearby Ocean Pines an ideal place to allocate your budget when searching for affordable rental properties. A short drive away, you can look to Salisbury, a university town with an ever-prevalent need for rental housing.
CONS
The Eastern Shore certainly holds an appeal for investment properties in Maryland. However, it does come with its own downsides that must first be considered. For many destinations on the Eastern Shore, rentals tend to be extremely seasonal from mid-spring to early fall. This diminishes the chances of having your investment property occupied year-round.
Another issue to consider is the immense amount of vacation rental competition. Ocean City’s skyline is dotted with chain hotels and condominium complexes that have long been established as vacation rentals. In a crowded market, it can be difficult to consistently secure tenants.
Finally, as a peninsula, transportation to the Eastern Shore can be a headache, especially during peak months. An excess of bridge crossings and traffic bottlenecks can produce frustration when trying to visit your own properties. If you’re less interested in seasonal rental markets, you may want to look to a popular urban area with a high demand for rental housing.
Baltimore City
PROS
Baltimore City has turned a heel recently, becoming one of the only affordable cities left in the DMV area. With D.C. costs skyrocketing, many have looked to Baltimore to save some money on their living expenses. Baltimore City benefits from a thriving year-round population, eliminating any issues of seasonality. Baltimore offers affordable properties for investors that sit within high-demand areas. Part of the resurgent interest in Baltimore is driven by its boom of up-start businesses. Investors are also attracted to the central location of the city, as Baltimore benefits from easy commutes to Washington DC, Philadelphia, New York, and Northern Virginia.
CONS
Like any major metropolitan city, Baltimore comes with its own concerns that potential investors should consider. The city’s safety issues are well documented. Baltimore boasts plenty of welcoming neighborhoods, but also several areas with high crime rates that may discourage investment. For a city of its size, Baltimore’s public transit is simply insufficient for much of its population, ranking 22nd out of 30 U.S. cities in public transport.
DC Suburbs
PROS
In recent years, the Washington D.C. suburbs have seen a massive population influx. The city has experienced rapid development, which has spread out into the surrounding suburbs in Maryland and Virginia. Growing demand for high-income employees has produced a housing boom in the region. These affluent suburbs are a great area to purchase investment properties in Maryland.
High-income tenant potential is one of the biggest reasons that D.C. has made our list. Higher rent means that you will be able to generate more passive income from your investment property. Washington D.C.’s exponential growth has fed into the viability of the communities around it for investors. Prestigious schools such as the University of Maryland also create a high demand for housing.
Finally, D.C. features one of the best public transport systems in the country with its widely used D.C. metro. In a region where public transportation can be lacking, Washington D.C. stands tall.
CONS
The first and most important drawback is the high cost of real estate. Compared to the rest of the country’s major metropolitan areas, DC ranks as the third most expensive city to live in.
Along with the high price is the competition with other housing offers. Additionally, traffic is a huge issue in D.C., which makes commuting without the use of public transport a daily hassle.
Deep Creek Lake
PROS
The Deep Creek region represents an ideal spot for investment properties in Maryland, especially for short-term rentals. Deep Creek balances many of the upsides while avoiding many of the downsides seen in other short-term rental markets.
While the Eastern Shore suffers from seasonality, Deep Creek draws in a year-round crowd of over 1.2 million visitors. In spring and summer, visitors come for activities on the lakes, as well as nearby forest and wilderness recreation in the sprawling mountains and woods of the Appalachian Mountains. In the fall and winter, ski enthusiasts flock to the area for trips to Wisp Ski Resort. This sustained rental market sets it apart for short-term investment properties in Maryland.
The Deep Creek Lake region features a diverse selection of properties, from expansive water-front mansions to cozy mountain-top chalets. You can even have custom-built log homes tailored to your investment needs. Deep Creek boasts a friendly local community and a breadth of year-round activities. The potential for a sustainable ROI is high thanks to its continued growth as one of Maryland’s top vacation destinations.
CONS
While Deep Creek is ideal for most situations, its mountainous location can create downsides for some investors. If you plan on frequenting your own properties, keep in mind that the region gets frequent snowfall in the winter months. With mountainous terrain and steep roads, it’s recommended to use 4-wheel drive vehicles in the area during winter. Additionally, while the direct region is rife with amenities and shops, it is surrounded by rural communities where access to shopping and services may be limited.
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