Real estate can help investors add to and diversify their income streams. Many are using it to hedge against inflation, too. If you’re considering a real estate investment in Richmond, it’s definitely worth a look.
Richmond is Virginia’s capital, located close to the state’s center and just 2 hours from Washington, DC. As an established Virginia locale, this city is rich in US history, from the Revolutionary War to the Civil War and more. Richmond’s population is growing steadily, and the city has a low cost of living and plenty of good schools.
If Richmond, VA is on your real estate radar, here are some things to know:
A growing population is vital when evaluating a real estate market. Steady growth can lead to property appreciation and increasing rents.
Richmond is Virginia’s fifth largest city as of 2022 at 229,233 residents. It has seen steady population growth for several decades, too. The growth rate has recently fallen but remains in the high 0.8% range. The UN projects those trends to continue through 2035, signaling stellar real estate opportunities.
The metro area has nearly 1.3 million residents spanning 17 counties and several smaller cities.
The city proper has a median age of 34.1, younger than the rest of the metro area, the state of Virginia, and the US.
A healthy and growing job market is an excellent sign for real estate investors. It draws more potential tenants to an area and helps them increase earnings. That could lead to higher rental income for you.
US News rated Richmond a 6.3/10 on its Job Market Index, calling its job market “healthier than similarly sized metro areas.”
As the state capital, Richmond contains a lot of professionals working in government.
Some other prominent economic sectors in Richmond include:
- Education and health services
- Mining, logging, and construction
- Professional and business services
- Trade, transportation, and utilities
Major employers in Richmond include:
- Altria Group
- Bon Secours Richmond
- Capital One
- Dominion Energy
- HCA Virginia Health System
- Virginia Commonwealth University Health System
Per capita and household incomes are a bit lower in the city than the metro area, and both are a bit lower than the state’s median income. However, Richmond’s cost of living is fairly low compared to the US average.
Overall, Richmond’s job market and solid income relative to cost of living indicate many opportunities here.
The Richmond area has over 120 neighborhoods, offering a variety of amenities, living experiences, and attractions. Picking the best neighborhoods can help investors maximize their investment returns.
Consider the following neighborhoods when looking at the Richmond market:
- Short Pump: This small, wealthy town is about 16 miles northwest of Richmond. Short Pump is best known for its top-notch public schools, excellent shopping and restaurants, and low crime rate. It offers a slower-paced feel overall.
- Wakefield: Wakefield is on the edge of the Richmond metro area, about an hour southeast. It’s considered the Peanut Capital of the World and is known for its famous Virginia diner. Wakefield is about an hour from Virginia Beach, making it a great neighborhood for residents who enjoy visiting the ocean.
- Tuckahoe: A quick 20-minute drive northwest from Richmond is Tuckahoe, located near the James River. Thomas Jefferson’s childhood home — preserved as a National Historic Landmark — is on Tuckahoe’s southwest end. The University of Richmond is in southeast Tuckahoe, so faculty and college students may call Tuckahoe home.
Real estate investors should evaluate home value trends in any market they plan to invest in. Steadily rising home values can help you maximize your returns in terms of rental income, and later, price appreciation if you plan to sell the property.
Despite the overall US housing market cooling off, Rocket Homes reports that Richmond is still a seller’s market. Redfin data backs that up — Richmond scored 89 on their Compete Score, slotting it into the Very Competitive category.
Redfin found Richmond’s average sale price is around $350,000. That’s up 11.1% from last year, and homes stay on the market for a median of eight days.
About 58.3% of Richmond-area residents are renters, and 41.7% are homeowners. Large and small apartment complexes make up 44% of Richmond properties, and the average rent is $1,619 per month.
Overall, there are plenty of opportunities for rental real estate investors in Richmond, Virginia.
Quality of Life
The Richmond area is rich in US history, drawing in millions of tourists annually and providing plenty to do for year-round residents.
Richmond was the Confederacy’s capital during the American Civil War. Residents and tourists alike can visit the American Civil War Museum and the White House of the Confederacy — the latter is also a museum.
History buffs can also drive west to Tuckahoe to tour Thomas Jefferson’s childhood home.
Virginia’s State Capitol building itself is a historical monument. It was designed by Thomas Jefferson and built in 1785.
Richmond is full of modern amenities and activities, too, like The Science Museum of Virginia and the Metro Richmond Zoo. Virginia Beach is only 2 hours away, making it the perfect weekend trip destination for Richmonders.
Speaking of the beach, Virginia has what some call a “Goldilocks climate” in that it’s never too hot or too cold. Summers can get muggy and winters can get cold, but it’s not as extreme as states further north or south.
Crime and Safety
Investors should always look at crime and safety stats when picking neighborhoods to invest in. Class A and B neighborhoods have lower crime but higher-value properties. Class C and D neighborhoods have properties at lower values, but crime might be higher.
Richmond’s metro area scored an 8/10 on US News’s Crime Index. That means its crime rate is lower than metro areas of similar sizes. Still, crime rates can vary by neighborhood within the area.
The highest-crime neighborhoods tend to be closer to the Richmond city center. This includes neighborhoods on both sides of the James River, including Bellmeade/Hillside Court, Old Town Manchester, Swansboro West, Mosby/Brauers, and Fairfield/Eastview.
Crime rates tend to fall further away from the city proper. Neighborhoods southwest of the city, such as Manchester Southwest, Land O’Pines, Meadowbrook, and Falling Creek Farms/Five Forks have some of the lower crime rates in the area.
Regardless of neighborhood, investors should consider investments in security for their properties. Home security systems, callboxes, and other similar measures can improve peace of mind for investors and tenants. They can also raise property values and help you increase rents.
Strong schools can be a boon for investors because they draw families to the area.
The Richmond metro area was recently named one of WalletHub’s most educated cities in the country, and it has the schools to back up that ranking.
Richmond has 47 public elementary, middle, and high schools. The area also has 86 private schools. US News recognized 33 of the area’s high schools on its Best High Schools list.
College students may offer investors an excellent rental market as well. The area is home to several institutions. Some of these include the University of Richmond, Virginia Commonwealth University, and Virginia State University (in Petersburg, VA).
Final Thoughts on Richmond, VA Real Estate
The Richmond, VA housing market is growing steadily in population yet offers a low cost of living and a healthy economy. Plus, its role in US history, decent climate, great schools, and proximity to Virginia Beach draw new residents and tourists. Whether you’ve been in real estate for years or are new to the game, Richmond, VA could be a worthy market to build your portfolio in.
Get Started Buying Homes With Evernest
Whether you’re purchasing one Richmond home or one hundred, you don’t have to go it alone.
If you’re ready to buy your first (or next) investment property, here are 3 steps to get started today:
- Subscribe to our podcast: The Evernest Real Estate Investor Podcast—for all things real estate investing, being a landlord, growing your portfolio, and more.
- Find a property: Make sure you sign up for our Pocket Listings to get notified of all the deals that come across our desk daily.
- Get an investor-friendly agent: We can help with that—we would love to help you buy your next rental property investment.