Maryland's largest city and economic hub, Baltimore is known for its beautiful harbor, unique neighborhoods, excellent museums, and the world-famous Johns Hopkins Hospital and University of Maryland Medical Center. It's a bit early to tell what impact, if any, Baltimore's recent civic strife will have on its rental market, but unrest often creates opportunities for value-focused investors with ready access to cash and credit to swoop in and purchase solid properties at steep discounts. For example, in the wake the 2014 Ferguson, Missouri riots, housing prices fell by as much as 40 percent. If you can get anywhere near the old rental rates, that's a solid ROI boost.
Q2 2015 Baltimore Rental Market Update
In Q2 2015, Baltimore was the fifth-best rental market in the Northeastern U.S. and 44th-best in the country as a whole. Since Q1 2015, Baltimore jumped three spots in the Rental Ranking Report's regional rankings for the Northeastern U.S. and fifteen spots in the national rankings.
There is nothing glamorous about the Baltimore rental real estate market. Baltimore property values increased just 2.62 percent year-over-year in Q2 2015, an appreciation rate only about half the national average during that time period. Rental prices improved at a slightly faster pace, 3.91 percent, but still increased at a rate significantly less (around 20 percent) than the national average. The Baltimore median age of housing inventory and vacancy rate were also slightly under their respective national averages in Q2 2015.
Regardless of the less than flattering picture these statistics paint, Baltimore can still offer rental property investors solid returns. The capitalization rate for Baltimore rental properties, a metric that compares annual rents with property values that is commonly used by investors to gauge the attractiveness of rental real estate investments, was 6.79 percent during Q2 2015 - roughly level with the national average. This means that despite Baltimore's sluggish rent and property value growth, local landlords collect a moderately large amount in rent for every dollar they spend purchasing rental properties. Baltimore also benefits from fairly high job growth (1.92 percent year-over-year) that, while slightly below the national average, should serve to further increase the demand for housing there.
Q1 2015 Baltimore Rental Market Update
All Property Management found in its Q1 2015 Rental Ranking Report that Baltimore is 59th out of the 75 markets we track. But again, a bold investor with an eye for value should be able to do well in this troubled city.
Baltimore's best selling point for rental property investors is its solid cap rate of 7.15 percent, ranking it 36th in the country for that metric. Rents have been softening in Baltimore, down 1.56 percent in the year ending in Q1 2015. But if you can pick up some discounted property as the city recovers from its trauma, you can help revitalize its housing stock while getting a tidy ROI in the process.
What data is this Rental Ranking Report based on?
To calculate the statistics found in the Q2 2015 Rental Ranking Report, All Property Management gathered data, including the most recent government housing and jobs data, for 75 metros across the United States. Specifically, we looked at home vacancy, capitalization, home value appreciation and job growth rates, changes in rental prices, and the average number of days properties have been on the market to determine which U.S. metros will give investors the highest returns on rental investments. Click here to learn more about the Rental Ranking metrics.
Should I invest in Baltimore rental property?
Thinking about renting out a property in Baltimore? Save time, avoid hassle and maximize your rental income by having a professional property management company operate your rental property for you. Click here to get a free quote from a local property manager or call 877-780-4510 to have the All Property Management staff get quotes for you.
All Property Management specializes in connecting rental property owners with professional property managers in communities across the United States. These property managers help set rental rates, advertise properties, screen and manage tenants, collect rent, manage vendor relationships and ensure compliance with local, state and federal housing regulations. They take the hassle and worry out of managing rental properties - all while maximizing rental property owners' rental incomes.