This biweekly sponsored column is written by the experts at Gordon James Realty, a local property management firm that specializes in residential real estate, commercial real estate and home owner associations. Please submit any questions in the comments section or via email.
A recent report estimates that the D.C. metro area will grow by 1.5 million people and add 1.1 million jobs in the next 30 years, and that growth is likely to bring plenty of opportunity for area property investors.
In Arlington County, projections by the Metropolitan Washington Council of Governments show that 69,000 new residents will move in by 2045. That’s a population increase of nearly a third, and it would bring the number of county residents close to 300,000.
And the county will see an even larger percentage increase in households by 2045 — nearly 40 percent — according to the predictions. That means adding more than 38,000 new households to the 103,600 counted in 2015.
Of course, all those new people will need somewhere to live. And if recent trends are an indicator, many will choose to rent their homes. In fact, they’ll be searching for the best property management company in Arlington, Virginia, not to mention Northern Virginia and the metro D.C. area.
So, while a glut of recent apartment construction may have led regional rents to flatten a bit lately, it looks like there will be plenty of demand for new and existing units in the coming years.
In fact, average annual rent increases will likely top four percent in 2018, according to Delta Associates, a company that analyzes regional housing trends. The company predicts a stabilized vacancy rate of 3.4 percent in Northern Virginia in September 2018. The vacancy rate was 4.1 percent in the third quarter of 2015.
Based on the COG’s report, it also looks like many of the new jobs coming to the region will be those that are more likely to support qualified renters. It predicts a shrinking number of federal government jobs but large increases in the relatively high paying professional and business services sector. Growth in the information sector is also expected to be strong.
Arlington’s share of the region’s job growth will bring nearly 70,000 new jobs to the county, an increase of 33 percent, the report said.
For existing and would-be landlords, the population boom, job growth and ongoing residential development certainly bear watching. As supply and demand in the market changes in the coming years, adjusting investment plans, considering renovations and other ways to keep your property competitive and keeping your rents in sync with market rates will help you maximize returns.