TLDR crowd: Thinking of investing in Maryland real estate, skip to list below
I’ve got a rental house in NC that has nearly doubled in value, but the rents haven’t kept up. I’m contemplating selling it or doing a cashout refi, but I’m not sure where I would put that money (about $200k). I’d like to keep it in real estate, because I like the power of leverage, and I like the tax benefits. The rents in the region of NC where my rental is located have stagnated in proportion to property value, so I’m fairly certain I’m not going to put more money there.
So with that in mind, I’m looking out of state. The two main places I’ve looked are Shreveport, LA and Howard County, Maryland. These two places were mostly looked at because I have family there, my wife’s family is all in Shreveport, while my family is in Maryland. I’ve eliminated Shreveport as a contender because even though the buy-in is low, the rents are stupid low, like sub $1000 for a 3/2. My best guess is that there’s not a whole lot of industry there outside of oil and gas, and O&G is very cyclical.
That has me looking at the infill between Baltimore and DC. A 3/2 rents for ~$2200-2500, and I don’t think it would be insane to find a fixer upper for $200k that I can drop $30-50,000 on to make it nice. If I can pull in $500/month of cashflow after expenses, I'll classify it as an okay deal. The government is a large employer in the area (I’m the only one in my immediate family that doesn’t work for the gov’t or a gov contractor) and I don’t really think America is going belly-up very soon. Seems like a decent place to invest.
The things I’m not really sure of are:
-Local laws and regulations?
I grew up in Maryland, but I moved to NC when I was 17 to go to college. I’ve never been a grownup there, and I’ve never owned a house there. My parents own their home, but they’ve got super high salaries and don’t have expensive taste, so their perception of value is a bit warped. They’ve also never been landlords. What should I look out for? Extra taxes for out of state landlords? Odd tenant protection stuff?
-Contractors?
Around where I live, its nearly impossible to get any work done by anyone, there’s just a huge shortage of qualified contractors. Is the situation similar in Maryland? My dad won’t pay anyone to do anything on his house, so I don’t have a good feel for how hard it would be to hire someone for a home rehab.
-I don’t know what I don’t know?
Any other weird Maryland specific stuff that I need to be aware of?