Why Baltimore is a Great Real Estate Market for Investors

baltimore real estate investments

As Baltimore hard money lenders, we’re always looking at trends that are happening in our own backyard. Though we lend in more than 30 states, we got our start right here in Maryland and are still very active in the local area. As locals, we see a bright future for this city despite the challenges it has been facing in the wake of disinvestment and diaspora in past decades. While other cities in the Northeast Corridor between DC and Boston have experienced ballooning costs of living, Baltimore remains a holdout of relative affordability, and we believe this to be a boon to the overall real estate market in years to come.

Of course, we wouldn’t espouse this way of thinking if there weren’t data to back up the idea that Baltimore is a great place to invest in real estate. There are a lot of factors to consider when looking at whether or not a particular area is “good” to invest in, so here we’ll highlight some of the brightest spots that prove Baltimore is an up-and-coming city, not a forgotten relic doomed to decay slowly over time.

Long-Term Real Estate Investing Prospects

It’s no secret that Baltimore was once a very promising working-class city, friendly to migrants from all corners of the globe, providing opportunities for work in heavy industry, transportation, and shipping. As the global economy shifted over the years, Baltimore’s prominence waned, jobs disappeared, and the vibrant city began to experience a serious decline in many of its working-class neighborhoods. However, Baltimore has remained the largest city in the state of Maryland and serves as its cultural center.

In recent years, both the Maryland State and Federal governments have joined initiatives to revitalize Baltimore by attracting employers, particularly in the sectors of IT, life sciences, and other high-tech industries in which many workers are well-paid and well-educated. As these programs unfold over the next several years and new offices open in developments that are currently underway, the city expects to welcome thousands of new residents.

Currently, Baltimore is seeing an average 11% annual appreciation rate in the real estate market, with home values increasing over 40% in the last 5 years. Home prices in Baltimore are still 40% less expensive than the average in neighboring DC, and considering their proximity, Baltimore is an attractive place to live for workers in DC who are looking to save on living expenses. All this considered, the long-term prospects of investing in Baltimore real estate appear to be quite positive.

Baltimore Has a Strong Renters’ Market

In 2020, ATTOM Data Solutions ranked Baltimore as the 4th-best performing market for single-family rental yield in the United States and remains among the most investor-friendly cities when it comes to cash flow and appreciation in property values. Rental properties currently account for 52% of occupied housing units in Baltimore, so if you’re planning on holding long-term rental investments, there will be plenty of renters to occupy your properties. There is also great diversity among neighborhoods, with average monthly rents ranging from just under $1,000, all the way up to the $4,600 range in trendy neighborhoods like Canton and Fells Point.

For flippers, there is a lot of opportunity for full gut rehabs in parts of the city that have experienced urban decay over the years. A lot of these areas sit just outside of neighborhoods that are on the rise and are sure to experience revitalization as government programs attract jobs that will attract more people seeking to live in and around established neighborhoods like Hampden, Fells Point, Federal Hill, Station North, and Mount Vernon. Even within the last decade, neighborhoods like Woodberry and Remington have come a long way from the neglected areas portrayed in HBO’s The Wire.

Thinking About Investing in Baltimore Real Estate?

We’re more than happy to connect with real estate investors who are considering investing in the Baltimore market. Considering it’s literally our backyard, we know all of the ins and outs of investing in this city and what investors should be looking for when looking for quality deals. Unlike standard lender-borrower relationships, at Pimlico, we see ourselves as your business partner – we know that we are our most successful when you’re experiencing success in growing your business, so we take an active interest in ensuring that your projects will be worthwhile investments for you.

Have a deal you’d like to discuss today? Feel free to give us a call at 410-855-4600, or get a ballpark quote on rates you may qualify for by filling out our online rate calculator.