5 Can’t-Miss Spots to Buy a Rental Home in D.C.

  • Author: Devin Henry
  • Last Updated: March 22, 2023
Table of Contents

Washington, D.C., is a highly desirable place to live, creating a robust rental market in many parts of the city. Investors will have to do their homework before purchasing a rental property, though, because it’s easier to find and keep tenants if you own in an in-demand area.

The rental market can change from year to year as neighborhoods evolve, but there are some elements every tenant is seeking that you’ll only find in some parts of the city. Understanding your target tenants and their must-have features can help as you look for a property to buy.

Some locations are more coveted than others when it comes to identifying the best rental market in D.C. This guide will let you know what tenants are looking for and where you can find properties that meet their needs with positive cash flow potential in the Washington, D.C., area.

Things to Look for in the Best Rental Property Markets

The best rental markets near D.C. have features both investors and potential tenants will appreciate. The property you select should be in a location where people want to live long term with access to all the essentials. Elements to consider as you search for the ideal investment property include the following:

Return on Investment

The return you’ll earn on your real estate investment depends on its cost, how much tenants are willing to pay, and how much you can resell it for later. Looking at the best cash flow real estate markets can help maximize your return because those areas tend to have higher rental costs. Researching the rental prices of some comparable homes gives you a better idea of the return on investment you can expect.

Nearby Amenities

Another aspect to look at is the nearby amenities available for renters. Most tenants want easy access to grocery stores and a few restaurants at the very least. Schools, nightlife, parks, shopping, and outdoor activities are nice bonuses that could be necessary amenities for some tenants. 

Accessibility

Things like walkability, bike paths, transit options, and parking all come into play when examining a property’s accessibility. Metrorail access could be essential for some tenants, while others prefer to drive and need a reserved parking spot. The best cash-flowing real estate markets tend to be easily accessible and offer multiple ways to get around the city.

Looking into what people relocating in the D.C. area want in a rental property can help you identify the best markets in which to buy. Seeking an investment home in a desirable neighborhood is one way to improve your outcomes.

Five of the Best Real Estate Investment Markets in D.C.

Determining the best place to invest in real estate in Washington, D.C., can be challenging because you’ll have to look at multiple factors. Your chosen neighborhood should offer the amenities and accessibility your tenants want, but prices should be low enough that you can earn a return on your investment over time. Some of the best real estate investment markets in D.C. include the following:

1. Penn Quarter

Perhaps the best market for real estate investing in D.C. is Penn Quarter, a centrally located neighborhood sitting blocks from the U.S. Capitol, The White House, and countless other government buildings. This location makes it ideal for renters working in government, and its access to transit, restaurants, and nightlife is nearly unmatched. Penn Quarter real estate is entirely made up of apartments, but its median list price, according to realtor.com data, of $525,000 makes it possible to turn a profit.

2. Dupont Circle

Dupont Circle is away from the bustle of Penn Quarter and the U.S. Capitol, but it’s close enough that government workers can make the commute on the Metro or on foot, particularly when the weather warms up in the spring. It also features nightlife, restaurants, and shopping, making it popular with young professionals. The median listing price in some sections of this neighborhood is $555,000, and there are single-family homes that provide more options for investors.

3. Southwest Waterfront

The Southwest Waterfront features a mix of apartments and single-family homes and enjoys a wonderful location just south of the U.S. Capitol on the Washington Channel. This area is excellent for those who love boating due to its abundance of marinas offering access to the Potomac River, and it also features numerous waterfront restaurants and easy access to Nationals Park. The median listing price of $451,000 is more than reasonable when factoring in the neighborhood’s amenities.

4. Takoma

The north end of D.C. is home to Takoma, a suburban neighborhood that many families relocating to the region find appealing. This area has excellent schools, playgrounds, and other activities for kids and is mainly composed of single-family homes. The median listing price of $845,000 is reasonable, given home type and nearby perks, especially since you can reach Union Station in less than 15 minutes on the Metrorail.

5. Mount Pleasant

Mount Pleasant is a suburban neighborhood with a mix of apartments and single-family homes. It has a few restaurants and some grocery options on Mount Pleasant Street and plenty of nearby schools, parks, and recreation centers. The neighborhood backs onto a green space and is very quiet, making its $687,000 average listing price appealing.

The rental market in D.C. has plenty of options for investors, but these popular neighborhoods offer some of the best returns you can expect on your property. Look at the available listings to see if anything stands out when you’re ready to buy.

Buying the Ideal Rental Property

Carefully researching D.C.’s best rental property markets gives you an advantage as you begin your search. You’ll also want to contact an experienced real estate firm that knows this competitive market inside and out.

Nomadic Real Estate can help you secure the perfect investment property by providing early access to listings before the general public sees them. We can also supply property management services after you buy a rental home, ensuring everything goes smoothly once you become a landlord. Contact Nomadic Real Estate for more information on the best market for real estate investing in Washington, D.C.

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

Owner Portal Reports
  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

Enhanced Rent Roll Report
  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

Unit Comparison Report
  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

Income Statement by Month Report
  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

Owner Portal Documents
  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

Owner Portal Property Statement

You'll also find a month-over-month operating statement:

Month over Month Statement

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

Commincation Dashboard Screenshot
  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Owner Portal New Message Screenshot

Responses will show up in the conversation ticket:

Portal Conversation Response Screenshot
  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Owner Portal Comment

Each conversation will be logged in its entirety:

Portal Conversation Snapshot

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

Owner Ledger Dates
  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

Ledger Property Column
  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

Owner Ledger Description Column
  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

Owner Ledger Amount Column
  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

Owner Ledger Account Balance Column
  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

PW Portal Filters

View a snapshot of income and expenses on your dashboard:

PW Owner Dashboard View

See every transaction in real-time on your ledger:

Owner Portal Ledger View

Statements and forms will be posted to your documents library:

Owner Portal Document Library

View a suite of real-time financial reports:

Portal Reports View

See a running list of all bills, and drill down for more detail:

Owner Portal Bills View

Under Bill Details, you'll find dates/descriptions/amounts and more:

Portal Bill Details

You can also communicate with your Account Manager through the portal:

Owner Portal Communication Tools

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

Net Distribution

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.