Why we chose to invest in Baltimore

The United States is one of the world's largest real estate markets and is one of the most favorable places to do business due to predictable and transparent legal system, low taxes, outstanding infrastructure, and access to world’s most lucrative consumer market (see our article Why invest in real estate in the United States). 

Yet Baltimore is not a city that we hear about very often, especially in French-speaking countries, so you may wonder why you should invest in Baltimore with BaltimoRealEstate LLC rather than in other large cities such as New York City or Washington D.C. that seem more attractive.

Baltimore is first and foremost an attractive city because it is ideally located between Washington D.C. and Philadelphia (only about 50km from the capital, Washington D.C.; see map). The Acela Express train travels the distance between Boston and Washington D.C., passing through Baltimore, Philadelphia, and New York City among others. This line will be replaced by the Avelia Liberty, a high-speed train model marketed by Alstom that will be even faster. The trains are scheduled to come into service in 2021 and promise to attract many landlords to Baltimore.

Baltimore is above all a strategic point for real estate investment because the city has a significant number of distressed (thus under-valued) properties. 20.7% of the properties sold in Baltimore during the second quarter of 2018 were distressed, a greater portion than in any of the 51 other metropolitan areas.

The median home value in Baltimore was $116,300 in September 2018, an increase of 25.2% from 2017. In September 2019, the median home value increased again to $121,100, an increase of $5,000 in a single year. The median home value continues to rise, making Baltimore the ideal city to invest in real estate, as profits are almost guaranteed.

Investors investing in Maryland can also benefit from significant tax breaks through the federal " opportunity zones" program, which are census tracts in which new investments can be eligible to preferential tax treatment. These federal tax incentives have been designed to funnel investment into economically distressed communities over the next decade, spurring job creation and economic development.  These tax benefits include a temporary deferral of inclusion in taxable income for capital gains reinvested in an opportunity fund until December 31, 2026. Some 149 areas have been approved by the U.S. Treasury Department in Maryland.

In addition, Baltimore has many employment assets, including Johns Hopkins Health System, one of the world's greatest hospitals and medical institutions, and Johns Hopkins University, training the country's best doctors. The future growth of the Baltimore job market is estimated at +36.3%, promising the arrival of many workers looking for new jobs and real estate.

Lastly, Baltimore is a strategic point regarding the average real estate transaction time. New York City, for example, is one of the slowest cities in the country ; real estate properties are generally sold after 137 days (4.5 months) in the market.

Thus, BaltimoRealEstate LLC acquires undervalued or distressed properties located in areas undergoing significant revitalization and urban redevelopment in the City of Baltimore. In cities such as New York City, Washington D.C. and Miami, real estate properties are almost never undervalued and auctioned, making it much more difficult to realize a return on investment after renovation and resale.

Sources :

https://en.wikipedia.org/wiki/Acela_Express

https://fr.wikipedia.org/wiki/Avelia_Liberty

https://www.zillow.com/baltimore-md/