What to Know About Investing in Alexandria's Rental Market

The Pros and Cons of Investing in Alexandria's Rental Market


Aerial View of Alexandria, Virginia


From a quick look, it seems that Alexandria, Virginia, is a perfect location to jump in and begin a rental investment business. There are many ideal financial reasons Alexandria makes a lot of common sense, but spelled out in a budget and a return on investment analysis, investing in a Alexandria rental home may be more than your budget allows, especially for the first time investment property buyer.



Pros for Investing in Alexandria's Rental Market


View of Old Town Alexandria from the Potomac


The suburbs that surround Washington, D.C., weather real estate and economic fluctuations more successfully than much of the U.S. This predictability holds true for Northern Virginia, and specifically Alexandria. Stability and wealth is of course tied to the federal government and its far reaching resources. 


  • Efficient public transportation in and out of Washington D.C. (and nearby cities in Maryland and Virginia) allows renters easy access to work in the city. 
  • The military has a strong presence, not only operating out of the Pentagon, but servicemembers relocate to every part of the City of Alexandria and Alexandria, Fairfax County, to work at Fort Belvoir, Joint Base Anacostia-Bolling, and Fort McNair, in addition to numerous nearby installations. 
  • Academia flourishes throughout the region. From major universities to the Alexandria campus of Northern Virginia Community College, students and college staff alike are looking for single and multi-family homes to rent. 
  • The region is affluent and transient. In fact, U.S News & World Report named Fairfax County number 2 of the 10 Richest Counties in America in 2018. This means a constant stream of renters who can afford the prices of an Alexandria rental are searching for housing. 

Cons for Investing in Alexandria's Rental Market

Northern Virginia tends to buck national real estate trends and operates within its own real estate market successfully. Although Alexandria real estate remains steady during turbulent financial periods, this means real estate deals can be hard to come by.


  • Creating positive cash flow from a rental purchase is difficult unless a large amount of cash is part of the initial purchase deal. 
  • Finding an affordable rental to buy is increasingly difficult for first time investors. Scarcity and over inflated home prices are the main obstacles. 
  • Alexandria homeowner’s are awaiting the full blossom of the Amazon effect and sitting on their property until they feel the maximum the market can hold is achieved, further tightening housing inventory and pushing purchase prices upward.
  • Everyday investors are competing with foreign investment firms who are purchasing large swaths of property to rent to incoming Amazonians and the follow-on industries involved after the arrival of H2Q. Finding a multi-family rental to buy is proving to be even more difficult. 


Where to Find Affordable Investment Rentals in Alexandria

For those investors looking to buy properties in Alexandria under the $500,000 price point, Northern Virginia Magazine reports that there are still a few pockets in Alexandria where this is a possibility. These zip codes are all located in Fairfax County.


Typical Home Value:

  • 22306 Hybla Valley, $483,600
  • 22309 Mount Vernon, $445,100
  • 22310 Rose Hill, $499,100

All three of these areas are affordable at the moment, however, they will take direct impact from a major initiative that is occuring just miles away on Route 1. Embark Richmond Highway is an approved study that has collected and suggested major changes along the corridor. From street widening, to additional affordable housing, and the ultimate extension of the Yellow Metro line, this area is ripe for the positives and negatives that occur with modernization. 

Alexandria VA Zip Codes and Borders is a useful source to understand where you'll live, shop, and play.

Expect these changes to also affect one of the top criteria for making a wise rental home decision: the quality of public education. Fairfax County is widely known for providing quality education, however, the schools along the Route 1 corridor have typically faced the issues that come from overcrowding and serving student populations with economic challenges. As Embark progresses, the hope is that these issues will be tempered, but the influx of new families to the area will potentially strain classroom sizes further. 


Calculating Beyond the Mortgage and the Rent

Alexandria rental home investors have their work cut out for them to be successful. The simple math of charging more for rent than your mortage payment will be sorely lacking. Calculating correct cash flow is critical to the entire purchase, taking into account the striking amount of taxes that are normal for Fairfax County and the City of Alexandria. That’s just the beginning; mortgage interest, depreciation, and operating expenses are also part of the equation. 


Each investor has their own reasons for purchasing rental property. Whether to earn a passive income, or to secure a home to return to years later, each situation is nuanced with specific details. Determining the actual numbers needed to make an Alexandria rental business successful is the first crucial step. Potential buyers should prepare to dissect and confer with experienced professionals in the accounting and real estate business before committing to the process.