Real Estate
Renting vs. buying, revisited
If you’re staying 5 years or more, it makes sense to purchase a home

This is an updated version of my very first column in the Blade from November 2012. The example I used there to consider renting vs. buying was a 1-bedroom, 1-bath unit in a Navy Yard Co-op at $1700/month rental or a $239,000 purchase price. Since that time, rental prices in that building have increased 15%, and the purchase price for that coop has increased 32%. So in this article, I use a contemporary example of renting vs. buying a 2-bedroom/2-bath townhouse-style condo at the Car Barn in Capitol Hill.
Initially it makes sense for newcomers to D.C. to rent while you get a feel for different parts of the city where you might like to ultimately live. But once you decide you’re going to be in Washington for five years or longer, it probably makes sense to start thinking about buying a place—even a starter place from which you might move up.
I say “five years” because that is the average amount of time it will take for you to recoup your initial investment in buying—and later selling—a home. It will cost you around 3.5 percent in additional costs (mainly for the city recordation tax and title-related expenses) on top of your purchase price to buy a home. And when it comes time to sell, it will cost you around 8 percent of the selling price (mainly for commission expenses and the city transfer tax) to sell your home. So even though it’s going to cost you around 11.5 percent to buy and sell a home; conservatively assuming 2-3 percent a year in appreciation, you should be able to recoup that extra cost in around 4-5 years.
One major hurdle in buying your first place is to come up with the down payment. It is a daunting challenge to save 10 to 20 percent of the purchase price of a home that may cost $400,000- 500,000. Even saving 3.5 percent (the minimum amount required for an FHA mortgage, now matched by some conventional mortgage programs) can be difficult when you are first starting out in your career. You may be fortunate enough to have a family member who will help you out with a down payment gift to get you started (don’t forget to get that gift letter from them). Or you may be able to qualify for one of the assistance programs like DC Open Doors, run by the city to help first-time buyers with their down payments. And once you’ve “put your chips in the game,” you get to continue to play up as long as your stake increases. Plus you get a nice bonus every year in the form of tax credit for the interest paid on your mortgage.
So let’s return to the initial question that serves as the title of this article: Should I rent or should I buy? Let’s do the math based on the chart above:
Let’s say you’re paying $2900 a month for a 2-bedroom/2-bath unit at the Car Barn. In the course of five years, you’d pay $174,900 plus your initial $2900 deposit for a total of $177,800—with no financial advantage to show, not even a tax credit. With a purchase price of $505,000 for the same unit and a 20 percent down payment (to avoid Private Mortgage Insurance) and an Adjustable Rate Mortgage of 2.75 for 5 years, you would pay $2871 a month for principle & interest, condo fees (including taxes) and homeowner insurance—already a $29/month savings over renting. In the course of five years, you’d pay $172,000 ($127,260 in principle, interest, taxes and insurance) for a savings of $1740 over renting.
Assuming 5 percent appreciation per year (which is closer to what the DC market has done over the last 5 years), your initial investment would be worth $644,522 after 5 years and you would have been paying down your $404,000 mortgage, so with appreciation, you would have accrued $287,220 in equity. Plus you would have received a credit for a total of $52,450 in interest payments, which at a 22 percent tax rate would have given you $2307 tax credit for each of the 5 years you lived in the home. So, even assuming that you were renting and had invested the original down payment amount of $101,250 in an index fund at 5%, you would still have a net gain from buying of $66,944! (And even counting your 8% cost to sell at 5 years should you decide to do so, you would still come out ahead by $15,344.)
Of course, as they say in automobile ads touting the fuel efficiency of a certain vehicle, “Your mileage may vary.” And in the case of considering whether to buy a home, you should start by consulting a mortgage professional who will help evaluate your situation and mortgage-readiness. But when you are ready to buy, a home continues to be one of the best investments you can make, especially over time and in spite of periodic market adjustments like the one we’re just recovering from. And unlike stocks or other investments, you actually get to live in this one while your investment appreciates.
Happy hunting.
Ted Smith is a licensed Realtor with Real Living | at Home specializing in mid-city D.C. Reach him at [email protected] and follow him on Facebook, YouTube or @TedSmithSellsDC. You can also join him on monthly tours of mid-city neighborhood Open Houses, as well as monthly seminars geared toward first-time buyers. Sign up at www.meetup.com/DCMidCity1stTimeHomeBuyers/.
Real Estate
Acquiring a down payment for your dream home
Unconventional strategies for finding the money you need

Purchasing a home is a significant milestone, but for many aspiring homeowners, the biggest hurdle is saving for a down payment. While traditional saving methods are widely known, exploring creative and unconventional strategies can provide alternative pathways to gather the necessary funds.
In this article, we will explore a range of innovative approaches to acquiring a down payment for your dream home. By thinking outside the box and considering unique options, you can turn your homeownership aspirations into reality.
1. Shared Equity and Co-Buying:
Consider exploring shared equity or co-buying arrangements with family members, friends, or trusted partners. Pooling resources can significantly boost your collective down payment savings, making homeownership more attainable. Whether it involves jointly purchasing a property or establishing an agreement to share ownership and expenses, this approach allows for shared financial responsibility and increased purchasing power.
2. Down Payment Assistance Programs:
Research and explore various down payment assistance programs offered by government agencies, non-profit organizations, or local housing authorities. These programs provide financial aid or grants to eligible homebuyers, assisting them in meeting the down payment requirements. Each program has specific criteria and limitations, so it is essential to understand the options available in your area.
3. Creative Financing Options:
Investigate alternative financing options such as seller financing, lease-to-own arrangements, or rent-to-own programs. These arrangements often provide more flexibility in acquiring a down payment and transitioning into homeownership. Seller financing allows buyers to negotiate terms directly with the seller, while lease-to-own or rent-to-own agreements provide an opportunity to build equity over time while renting.
4. Crowdfunding and Community Support:
Tap into the power of crowdfunding platforms and community support to gather funds for your down payment. Share your homeownership goals with family, friends, and social networks, and consider launching a crowdfunding campaign to garner financial contributions. Additionally, some employers offer matching programs for down payment savings, so explore potential workplace assistance programs or incentives.
5. Homebuyer Grants and Loans:
Research available homebuyer grants or loans specifically designed to assist first-time buyers or those with limited financial resources. These grants and loans can provide a substantial boost to your down payment savings. Government agencies, local housing authorities, and non-profit organizations often administer these programs, offering various terms and conditions to support homebuyers.
6. Income-Generating Assets:
Explore income-generating opportunities to supplement your savings. Consider renting out a spare room, starting a small business or freelancing, or investing in income-generating assets such as rental properties or dividend-paying stocks. Generating additional income can accelerate your down payment savings, bringing you closer to homeownership faster.
7. Negotiating with Sellers:
When making an offer on a property, explore the possibility of negotiating a lower down payment requirement with the seller. In some cases, sellers may be open to more flexible terms, especially if it expedites the sale or helps them achieve their own financial goals. Engage in open and honest communication during the negotiation process to explore mutually beneficial solutions.
8. Downsize or Liquidate Assets:
Consider downsizing your current living situation or liquidating assets that are not essential to free up funds for a down payment. This could involve selling a car, downsizing to a smaller rental, or parting with belongings that hold significant value. Evaluate your current financial situation and identify areas where you can make temporary sacrifices to prioritize homeownership.
9. Savings and Budgeting Strategies:
Implement creative savings and budgeting strategies to accelerate your down payment savings. Explore the possibility of living with roommates, cutting back on discretionary expenses, or negotiating lower interest rates on existing debts. Every dollar saved brings you closer to your down payment goal, so diligently review your budget and identify areas where you can reduce expenses and allocate more funds towards your down payment savings.
10. Employer Assistance Programs:
Check if your employer offers any homeownership assistance programs or benefits. Some companies provide down payment matching programs, low-interest loans, or financial counseling services to help employees achieve homeownership. Take advantage of these resources and explore how your employer can support you in reaching your down payment goals.
Persistence and creativity are key when it comes to acquiring a down payment. Stay focused on your goal, be open to alternative methods, and adapt your approach as needed. With determination, resourcefulness, and a willingness to explore new avenues, you can overcome financial barriers and achieve your dream of homeownership. Start exploring these unconventional strategies today and take a step closer to making your dream home a reality.
Jeff Hammerberg is the founder of GayRealEstate.com, the largest and longest-running gay real estate agent referral service in the nation, boasting more than 3,500 LGBTQ Realtors who operate in cities across the United States, Canada, and Mexico. For more than 25 years, he has been a prolific writer, coach, and author.
Real Estate
Thinking of renting your place short-term in D.C.?
Here are some key factors to consider

Summer is coming, and in D.C., many homeowners turn their attention to generating revenue from their primary D.C. residence while they are away for the summer. Due to the way some D.C. employers enable staff to work remotely and permit longer vacation schedules in the summer months, many owners can find extra income annually by considering short-term rentals. Here are a few key things you should know before getting started.
In 2021 the D.C. Department of Consumer and Regulatory Affairs announced it was “finally ready to start implementing and enforcing ” a law passed three years earlier for short-term rentals (AirBnB, VRBO, etc.). According to DCist, the agency started accepting license applications for short-term rentals on Jan. 10 last year and started enforcing the law’s provisions in April 2022.
According to Martin Austermuhle’s “D.C. to Start Restricting Airbnb and Other Short-Term Rentals” he wrote for DCist, “The law applies specifically to short-term rentals, those lasting less than 30 days at a time. Under the new law, any D.C. homeowner who wants to rent out a bedroom, basement, or entire home on Airbnb or any other platform has to get a short-term rental license from DCRA. (The two-year license costs $104.50.)”
Charlotte Perry, owner of LUXbnb, a property manager specializing in furnished short-term rentals in D.C. for more than 15 years, is a trusted partner to Columbia Property Management. She shared her expertise and guidance with me on short-term rentals. Her business, LUXbnb, punches above its weight in the D.C. area, bringing owners greater opportunity to realize the gains they hope to make. She brings deep insight into what you can expect if you were to go down this path with your property.
Companies like hers function like any other property manager might. LUXbnb collects the rents, “hotel” taxes, security deposits, departure cleaning, and any other applicable feeds on behalf of the owner. They manage turnover between guests including cleaning and any needed repairs. And at the end of each month, they release the rental income earned less the management fee and any repair costs or new purchases.
In the District, if the owner resides at the house during the rental, s/he can host short-term renters all year long with no consequence. However, if, like many of Charlotte’s clients, the owner is renting their property while they are gone during the summer or while on assignment for, say, the World Bank, those owners can only do so for a total of 90 days for the entire year. Owners like these will want to consider that under the new law, you cannot rent out your second home as an Airbnb/VRBO short term rental, and so knowing the regulations can save you a lot of headaches.
Registration Requirements
Did you know all short-term rental hosts in D.C. are required to obtain a Short-term Rental License?
According to the Office of Short-term Rental Licensing, “In order to operate a short-term or vacation rental in the District, the property must be owned by an individual, and serve as a homeowner’s primary residence – with the owner being eligible to receive the Homestead Tax Deduction. ”
To be eligible for such a license the home must be your primary residence and owner-occupied. You will need to provide DC’s Office of Short-term Rental Licensing (DLCP) the following:
Specify whether you currently have a Homestead Exemption on the property.
Proof of your liability insurance with a minimum of $250,000 in coverage. (See below for more details).
A Certificate of Clean Hands issued within the last 30 days in the property owners name must be obtained from the Office of Tax and Revenue.
The owner, or “host,” must attest to the habitability of the property.
If the rental is a co-op, condo, or if the property is in a community where there is a homeowners’ association, the owner must attest that the bylaws, house rules, or other governing documents of the homeowner/condo/ cooperative governing board or association allow short-term and/or vacation rentals, do not prohibit owners from operating short-term rentals and/or vacation rentals, or that they have received written permission from the association to operate a short-term and/or vacation rental at the address.
Once you have successfully registered with DLCP, you will be provided with a license. You will then upload this Short-term Rental License number into your property profile in both Airbnb and VRBO. Those sites will then provide bookings for “under-31-nights” on your property.
By working with an experienced rental property manager specializing in furnished temporary stays, you can ensure that you’re operating your short-term rental legally and safely. Better yet, you can avoid any penalties or fines that could result from non-compliance with District regulations.
Some factors you might want to consider on your journey to short-term rental success:
Cleaning Fee and Preparation Service
Perhaps you’ll want to have a cleaning service at-the-ready in case your renters have a slight disaster while they’re there. Or maybe you’ll want a service to clean prior to arrivals and directly after departures, so you can quickly turnaround the property for further rental.
Pets
Do you want pets in your home while you’re away? If so, you might want to add in an automatic post-stay pet cleaning fee to cover the expense of hair and other less pleasant odor removal.
Insurance/Accidental Damage
Charlotte’s company takes out a $3,000 accidental damage insurance policy on every stay in lieu of holding a damage deposit. The cost to the guest is $39 per rental. This insurance is a safe-guard for the guest, property owner and her company, of course. This insurance policy “allows for the equitable transfer of the risk of a loss, from one entity to another – in this case the insurance company. It is a simple way for all parties involved to mitigate risk, and most importantly, provides peace-of-mind.”
Liability Insurance
As you saw above, the District requires all owners to possess a liability insurance policy with a minimum of $250,000 in coverage to gain a license in the District. A variety of companies can help, according to the Motley Fool’s “The Ascent” newsletter, but some do this faster and better than others. And they even recommend ones that are best for Airbnb and VRBO rental owners. The Ascent’s best homeowners insurance for short-term rentals include the following:
Allstate Insurance: Best for possessing a large network of agents
Proper Insurance: Best for Airbnb and VRBO owners
Nationwide Insurance : Best for bundling policies
Farmers Insurance : Best for vacation rentals
Steadily Insurance: Best for getting coverage quickly
Safely Insurance: Best for fast claims processing
Should you have further questions or seek to explore the option of short or mid-term rentals, do not hesitate to contact Charlotte Perry directly at 202-341-8799 or [email protected].
Scott Bloom is senior property manager and owner of Columbia Property Management.
For more information and resources, visit ColumbiaPM.com.
Real Estate
Multiple options for buying a beach house meant for rentals
Consider going in with friends, making use of the off season

As we near the summer season and you hear the beach calling and taste the orange crushes – let’s take a look at a few ways to make those dreams a reality. The real estate market across the U.S. is still very hot due to the lack of inventory and the higher interest rates. However, when looking at an investment property, it’s a little easier to stomach a higher interest rate when it is offset by rental income. Let’s take a look at a few of the options we have for rental styles.
The typical idea of a beach vacation is for a week right? While we wish it were longer (and it can be!) the usual summer beach vacation is a week long. In the Rehoboth and Delaware coast region – most homes rent for a week at a time in the summer season. While the idea here is to make the most you can in summer rentals – you as the owner, of course, can always block off weeks when you want to use the home for your personal use. Talk about the best of both worlds.
Short-term rentals are a great way to make some extra money. If you plan to use your beach house for most of the season but know you have a wedding weekend here and a week long vacation planned in the Bahamas – then put that on a short term rental site for those dates. This way you can make a little extra money. Most of the time, you can make as much or even more than a weekly rental scenario. Short-term rentals are great for the sporadic renter – if you want to use your home most of the time but you want to rent it out every other weekend and during the week all of August – you don’t have the need for the “my family rents this home the same week every week and has done so for three years now…” kind of dedicated renters. It is important to make sure that your community allows for short-term rentals or this option might not be possible for you.
If you know anything about the coastal regions in the Northeast – things in the winter are not like they are in the summer. In my humble opinion – they are better! But I digress. If you are looking at a rental pro-forma and wonder if it makes sense to winterize your beach house or to rent it out, I would say rent it. You can easily rent for long weekends in the “off season” and in most cases you can also rent to one person for the entire off season period as off-season rentals are hard to come by in most markets. In this case, you wouldn’t charge the same premium you do during the summer.
I have mentioned this ownership option before. If you have a group of friends that love to kiki in Rehoboth then it might just be an option to get four together and buy a house. I would say this option is a risky one and one I would highly encourage you to speak to an attorney about. The idea here is that an arrangement would be formed to outline what party uses the home during which periods of time. Expenses would be split based on share of the home.
Oftentimes people forget that you can often provide your rental home to a charity event for example an item at a silent auction for your children’s school gala. A portion would be tax deductible and as such is a savings for you that year. Of course – speak with a CPA to ensure these items are true and correct for you.
The above options are all great ideas in black and white on paper — but what option will work best for you is based on what you want, where you want to be, and for the last option, how well you trust your friends who you might be interested in doing a group beach house option with. In this case I would highly recommend speaking with an attorney who can walk you through the pros and cons of a group purchase with multiple people on a deed and mortgage.
Cheers to a happy, healthy, and fun 2023 summer season and hope you can make your beach house dream a reality – I’m here to help.
Justin Noble is a Realtor with Sotheby’s international Realty licensed in D.C., Maryland, and Delaware for your DMV and Delaware Beach needs. Specializing in first-time homebuyers, development and new construction as well as estate sales, Justin is a well-versed agent, highly regarded, and provides white glove service at every price point. Reach him at 202-503-4243, [email protected] or BurnsandNoble.com.
-
Opinions3 days ago
Republicans prove how vile and frightening they can be
-
Politics1 day ago
Elon Musk pledges to lobby for criminalizing healthcare interventions for transgender youth
-
Asia3 days ago
Second Japanese court rules same-sex marriage ban is unconstitutional
-
Arts & Entertainment4 days ago
Must-attend D.C. Pride events for 2023
-
Middle East5 days ago
Turkish activists fear Erdoğan will further restrict LGBTQ, intersex rights
-
District of Columbia3 days ago
D.C.’s Pride celebrations include parade, festival, fireworks, and more
-
Delaware4 days ago
Carper’s retirement opens historic possibilities in Delaware
-
Arts & Entertainment4 days ago
Washington Blade, Dupont Underground spotlight D.C. LGBTQ Changemakers with new exhibit