'Buy And Hold' DC Real Estate Investment Compass

Breaking down house hacking in the District of Columbia

Nov 09, 2025

The Long Game

Section: Investor Intel
Author: Susan Isaacs, Washington DC Real Estate Strategist

How can I build a Washington DC real estate investment portfolio with the greatest growth potential?
By starting with the purchase of a single family home house hack, scaling it to rental property using BRRRR, and continuing the practice over a period of years, increasing the size and value of each property purchased (and therefore its potential). Because if anything sells in the District, it’s trophy real estate.

About The ‘Buy And Hold’ Strategy

What Is it?

‘Buy and hold’ investors purchase property that is likely to increase substantially in value over time. The investor rents the property to offset overhead and provide cash flow, and may leverage it in order to purchase additional properties.

Buy And Hold can also be a house hack. A number of my clients have built very successful portfolios by purchasing a new property each year (obtaining owner financing and meeting the one year residency lending requirement), renting the basement or another portion of the property during that first year to lower overhead, then leasing the entire property when the year is up.

This scales into the BRRRR strategy, which is a form of Buy And Hold. Once the entire property is available for rental, any needed improvements are made, it is leased, then the property is reassessed and leveraged.

Why Is Buy And Hold A Good Strategy?

The Buy and Hold strategy allows investors to build a portfolio of properties focused on property appreciation, equity build, and cash flow. The investor profits in the short and long term and has the ability to tap equity for other investments.

Short term: The investor offsets mortgage and expense, and ideally realizes a profit by renting the property.
Long term: The value of the asset appreciates, and the investor’s equity builds.
During ownership, the asset’s equity can be leveraged (and re-leveraged) to acquire new investment properties.

This strategy works well with single family (fee simple) homes and multifamily properties purchased in desirable locations at the right price, and in good but not renovated condition.

The “buy and hold” real estate investment strategy is a time honored, long-term approach for wealth building via property appreciation, consistent rental income, and significant tax advantages.

Solid Bona Fides

Passive Income Potential: A carefully selected rental property can provide steady monthly cash flow from tenants, covering overhead and earning a profit.

Long-Term Appreciation: Historically, DC real estate values have risen reliably, often into double digits. Holding a property for years or decades in this market allows investors to benefit from that growth and potentially realize substantial profits when they eventually sell.

Equity Building: As rental income is used to pay down the mortgage, the investor’s equity in the property increases over time. This can be leveraged to acquire additional properties and expand the investor’s portfolio.

Tax Advantages: Real estate investors can take advantage of numerous tax benefits, which enhance after-tax returns. These may include deductions for:

Mortgage interest
Property taxes
Operating expenses (maintenance, insurance, property management fees, advertising costs)
Depreciation (a non-cash deduction that reduces taxable income without affecting cash flow)

There is also potential for capital gains tax deferral through a 1031 exchange when selling and reinvesting sale proceeds into another property.

Inflation Hedge: Real estate is an effective hedge against inflation because as general prices rise, property values and rental rates typical increase as well.

Tangible Asset and Stability: Unlike stocks or bonds, real estate is a physical, tangible asset that the owner can control. It’s far less susceptible to abrupt value fluctuations than the stock market.

Financing Advantages

Virtually any financing type works for a ‘Buy and Hold’ investment strategy. The easiest is conversion, i.e. converting a primary residence to an investment property with financing already in place. Assuming you started your real estate journey with a 30 year fixed conventional loan, probably at a low interest rate, this is the ideal start, unless your first property is a condo.

Another outstanding financing option for ‘buy and hold’ properties is FHA: This government-backed mortgage loan requires only a 3.5% downpayment and FHA interest rates are traditionally lower than market rates. Do consider upfront fees and MIP. FHA allows borrowers to financing multifamily properties up to a fourplex if you live in one unit.

BRRRR is Buy & Hold strategy used to quickly scale portfolios.

What type of properties can I buy and hold in DC?

Condos | Co-Ops

Condos and cooperatives are risky candidates for buy & hold because the investor doesn’t have control over the majority of the property, condos realize lower appreciation than other property types, and rental rules can change.

If you do purchase a condo or co-op as a ‘buy and hold’ investment, you’ll need a BBL license and potentially a certificate of occupancy. Read the rules here.

Single Family

Single family homes are ideal ‘Buy and Hold’ investment properties, especially if thehome can be rented in multiple parts (large home shared by individuals as roommates, English basement rental, etc.). These properties can appreciate well, and generate considerable monthly cash flow if purchased in a desirable location, in good condition, at the right price.

Again, if you purchase a single family home as a ‘buy and hold’ investment, you’ll need a BBL license and potentially a certificate of occupancy. Read the rules here.

Multifamily

Multifamily dwellings can be excellent ‘Buy and Hold’ assets.

Look for 2 unit single family, duplex, triplex and fourplex properties in desirable locations, in good condition. Purchase price should ideally conform to the 1% rule.

Note that renovation costs for a multifamily property will be double to four times the cost of upgrades to a single unit. The same is true for maintenance.

You’ll need a BBL license and certificate of occupancy for each unit. Read the rules here.

When To Sell A Buy And Hold Investment Property

There are a number of considerations for the sale of Buy And Hold properties.

Peak Value: This is the magical time when the property has achieved its highest potential. Equity has significantly increased, market conditions are favorable, cash flow is projected to flatten or decline, and/or major maintenance costs are looming.

Investment Strategy Shift: You’re interested in different types of investments, more profitable opportunities are available, you’re consolidating or shifting to a single property type such as multifamily

Personal Reasons: Retirement is a great time to cash out on equity built with investment properties. Or, your financial situation has changed and those properties will set a new foundation. There may be a long distance move that makes managing properties difficult. Or two lives have combined and must merge into a single lifestyle and investment strategy.

Any time a property’s value has matured above the price paid, the investor can sell or effect a 1031 exchange for another rental property.

Other Types Of Investment Properties In DC

House Hacking

Buy And Hold (can be a house hack)

Zuzu Notes:

Timing and planning your house hack often involves scaling. Many property owners initially begin with a basement rental in the home they occupy, later lease the upper floor, then expand to other methods. Or simply repeat!
Start With The Basics
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