Richmond Investment Property for Sale - 2023 Rental Home Appreciation
The Richmond real estate market is a seller's market that experts predict is moving toward a buyer's market. The reasons? Decreased sales activity, prolonged periods of low inventory, and increased mortgage rates. These conditions might scare off potential homeowners, but they create investment opportunities for property owners and real estate investors.
Savvy real estate investors should consider seizing the chance to enter Richmond, Virginia's rental market, before it heats back up.
Richmond's Attractive Housing Market
Richmond, VA, lies in Chesterfield County and Henrico County along the James River and the crossroads of I-95 and I-64. It has a rich history and is one of the country's oldest major cities.
Real estate investors can find nearly every property type in Richmond's property listings. They include everything from a foreclosure to a new home and a single-family home to multi-family townhomes or duplexes. Whatever you're looking to invest in, Richmond, Virginia, has it.
The Richmond area is home to many great neighborhoods and suburbs for real estate investors to consider. They include Church Hill, Lakeside, Midlothian, and Petersburg.
- Church Hill: Church Hill is a Historical District located southeast of Downtown Richmond along I-95 and the James River. It's where Patrick Henry gave his famous "Give Me Liberty" speech and has been transformed into a vibrant, urban neighborhood. The median listing price in Church hill is $270/sqft, and the median sales price is $399,930. The median rent is $1,400/month.
- Lakeside: Lakeside is located seven miles north of Richmond along I-95. It has a dense suburban feel and many parks that attract families. The median listing price in Lakeside is $215/sqft, and the median sales price is $285,000. The median rent is $1,620/month.
- Midlothian: Midlothian is located 17 miles southwest of Richmond along VA-76. It's the site of the first commercial coal mine in the Virginia Colony. Today, it's a quiet suburb that offers many outdoor recreation activities. The median listing price in Midlothian is $180/sqft, and the median sales price is $385,000. The median rent is $1,600/month.
- Petersburg: Petersburg is located 24 miles south of Richmond along I-95 and the James River. It's a small city with a lot of potential because it's currently undergoing revitalization. Real estate investors can find many renovated move-in ready homes for sale in Petersburg's property listings. The median listing price in Petersburg is $112/sqft, and the median sales price is $155,000. The median rent is $1,150/month.
Rental Home Appreciation in Richmond
The rental market in Richmond is strong. Over half (55%) of households are renter-occupied, and the city has a 94% occupancy rate. Combine this with Richmond's affordability, and there's a lot of opportunity for real estate investors to increase their cash flow through rental income.
According to Realtor, the median listing price in Richmond is $201 per square foot with a median sale price of $325,000. Zillow's Home Value Index reports a 15.1% change since last year. The median rent in Richmond is $1,860 per month. Experts project real estate investors can expect a cap rate of 8.3% on a Richmond rental property.
With numbers like this, a Richmond rental property has the potential to yield significant returns for real estate investors and property management companies.
Economic Growth in Richmond
Richmond is the capital of Virginia and the state's 4th most populated city. It's ideally located on the I-95 corridor, only a 2-hour drive south of Washington, DC, and a 3-hour drive north of Fayetteville, NC. As a result of its prime location, Richmond attracts businesses and residents alike. Richmond has held a 1% annual population growth rate since 2010.
Richmond's primary industries, outside of state government, are finance, healthcare, biotech, and manufacturing. The largest employers are Virginia Commonwealth University Health System, Capital One Financial, HCA Virginia Health System, and Bon Secours Richmond. The Richmond area is also the headquarters of Altria Group, CarMax, and Dominion Energy. These employers provide jobs and fuel the city's economy. In fact, the unemployment rate is just 3.7%, nearly half of the national rate.
The cooling Richmond housing market offers a window of opportunity for real estate investors. Combine that with the market's relative affordability, demand, good home price appreciation, and stable economy, and it's almost too good to pass up. Richmond homes should be on every investor's list.
Want to invest in a Richmond rental property? Sign up with Arrived to discover how we make real estate investment easy and affordable.