What is scaring you off from investing in Hampton Roads real estate?
Is it a misconception that we can unmask? A myth that we can bust?
All investments come with some level of risk, and there’s no avoiding that. Investing in real estate, as you know, is also risky in some cases. But it’s also a reliable, tangible investment that can make you a lot of money in the short-term and the long-term.
And yet, there’s often hesitation.
We’re here to lay to rest some of the most common misconceptions about Hampton Roads real estate investing. We won’t shy away from what people are talking about, but we will stand up for a market that we can tell you is strong, stable, and sure to provide the type of investment outcomes you’re hoping for.
Understanding the Hampton Roads Market
Before we break down the misconceptions, it’s essential to understand what makes Hampton Roads unique for investors. What are we even talking about when we talk about the Hampton Roads real estate market?
We’re talking about the region that includes cities like Virginia Beach, Norfolk, Chesapeake, and Newport News, among others. With a strong presence of the military, a large workforce, and a growing population, Hampton Roads offers a mix of urban, suburban, and waterfront investment opportunities.
There’s an opportunity to invest in long-term residential rentals or short-term vacation properties. Investors can look to commercial spaces, mixed-use developments, or even historic homes. The diversity of the market alone makes it a desirable opportunity for smart real estate investors.
Let’s take a look at those myths and misconceptions.
Misconception 1: Hampton Roads Is Too Expensive to Enter
Many investors from outside of the area (and even locally, if we’re being honest) assume that Hampton Roads real estate is prohibitively expensive due to its desirable coastal location and quality of life. How can an east coast city not be too expensive to buy a property? People often think about other nearby cities like Washington, D.C., Richmond, Baltimore, and Annapolis. Those are higher priced markets, but they’re not our market. This is actually a real estate market that’s a lot more accessible to a lot more people.
It’s just not that well-known.
While it’s true that waterfront properties can carry a premium price tag, the Hampton Roads real estate market offers a variety of options, from budget-friendly condos to income-generating single-family homes. Investors on a range of budgets can find properties that suit their financial goals, whether they’re entering the market for short-term rental opportunities or seeking long-term equity growth.
Consider an apartment building or a condo. Buy a property that needs a little work and fix it up for added value and easy tenant attraction. Compared to national coastal real estate markets like Miami or Los Angeles, Hampton Roads offers more affordable pricing with similar potential for returns, making it an attractive destination for new and seasoned investors.
The reality check is this: your investment dollars will go a lot further in Hampton Roads than in other markets.
Misconception 2: The Market Is Too Saturated for New Investors
Another misconception we’re always hearing is that it’s just gaining too much attention and everybody wants to invest in property. Too many investors, particularly institutional investors, are scooping up the available properties, elbowing independent property buyers out of the market.
We’re not here to gaslight you; some of this is true. Yes, this market is gaining a lot of attention from investors, for all the reasons we speak about constantly. But, it’s not true that big investors are buying up all the homes. There’s actually a pretty strong inventory of real estate available to investors with any budget or any set of investment goals.
Competition is a reality in any thriving real estate market, and Hampton Roads is no different. However, the idea that the market is “too saturated” is an overstatement and demonstrates a detachment from the reality of how things move here. The region’s economic diversity, driven by industries like defense, tourism, and shipping, results in steady demand from renters and buyers. Yes, there’s demand. But, it’s a healthy demand that creates space for a lot of different investors with a lot of different ideas about how to provide housing.
Additionally, the area's large population of military personnel and contractors creates transient housing needs, opening doors for buy-and-hold or short-term rental properties.
Here’s the thing. Success in Hampton Roads investing depends on strategy. Experienced investors will know that they can compete and succeed by targeting up-and-coming neighborhoods or focusing on specialized markets like military housing near bases or vacation rentals along the coastline. Don’t be afraid of the competition. Use it to learn and craft your detailed investment goals.
Misconception 3: Seasonality Will Hurt My Rental Income
If you’re an investor who is interested in short-term rentals, you might have heard the myth that you’ll only succeed during the summer, especially with a home on the water. No one wants to visit in the winter, right?
Wrong.
Every short-term rental market across the country is going to deal with seasonal fluctuations. This isn’t an issue with the market; it’s an issue with the way the market works. You have to be prepared for high periods and low periods as a vacation home renter or a short-term property owner.
With its coastal location, some investors assume Hampton Roads is only profitable during the summer months when tourism peaks. However, the region’s economy isn’t entirely reliant on seasonal tourism. The military presence, robust higher education systems, and year-round job market create consistent housing demand throughout the year.
Whether you’re renting out a home in Hampton Roads in the short-term or the long-term, there’s going to be a steady demand for rentals. Investors have the opportunity to balance both short-term vacation renters and long-term tenants with strategic property choices. For example, properties near universities or military bases provide year-round income stability, complementing any seasonal gains.
Misconception 4: Investing in Waterfront Properties Isn’t Worth the Maintenance and Insurance Costs
Yes, insurance costs have risen. Yes, maintenance costs have risen. Again, this is not an issue that’s unique to the Hampton Roads real estate market. It’s not an issue unique to waterfront properties.
If you want to buy a beach house, you’re going to have to prepare for that flood insurance and those seasonal maintenance costs. But, thinking that the costs will outpace the potential for profitability is a misconception that you can put to rest.
Hampton Roads’ stunning waterfront properties are undeniably appealing, but they evoke fear among some investors due to potential maintenance issues like flooding or saltwater damage. While these concerns are valid, they’re not insurmountable. Flood insurance, proper property inspections, and durable building materials can mitigate the risks associated with waterfront properties.
As experienced property managers in Hampton Roads, we can tell you that many successful investors regard the premium charged for waterfront rentals as significantly outweighing the maintenance costs. Coastal properties continue to command higher rental rates and resale values, making them an excellent long-term investment.
Misconception 5: Residential Real Estate Is Out. Commercial Real Estate is the Only Viable Option
Ha, no.
We understand that some investors assume that Hampton Roads is only ideal for commercial real estate investments due to its well-known shipping ports, naval operations, and business hubs. There is surely a lot of opportunity here for commercial investors who are looking to buy a warehouse or an industrial lot or even a shipbuilding center. But, that’s not all there is to this market.
While commercial properties are strong investment options, residential properties should not be overlooked. Residential demand remains robust thanks to the region’s growing population and growing number of military personnel. All of these people who work at the commercial factories, warehouses, etc. need a place to live. The thriving business community and the strong commercial core of this area only feeds into the residential real estate market. There is demand here for housing, and property owners know that they have a strong pool of qualified tenants.
Whether your investment strategy involves multifamily properties, vacation rentals, or single-family units, residential investments in Hampton Roads can deliver impressive returns alongside commercial opportunities.
Hampton Roads’ real estate market is a hidden gem for investors willing to look past the misconceptions that we have debated here. Its combination of diverse economic drivers, affordable entry points, and consistent demand makes it a prime market for real estate opportunities.
Like any real estate market, Hampton Roads has its share of myths and challenges. Be a responsible investor and refrain from buying into them. By arming yourself with accurate information and leveraging local expertise, you can confidently enter this growing and profitable market. Whether you’re a first-time investor or looking to diversify your portfolio, don’t overlook the opportunities this incredible region offers.
We can help. Please don’t hesitate to contact us at Doud Realty Services, Inc. We provide expert property management in Norfolk, Portsmouth, Hampton Roads, as well as surrounding areas such as Virginia Beach, Suffolk, Chesapeake, and Newport News.