- Scott Westfall
Why You Should Invest in Virginia Beach Real Estate in 2023
Updated: Jan 19
In a world full of “Rich Dad Poor Dad” and “Bigger Pockets”, you’ve likely heard that residential real estate is the best investment you can make, and now you’re wondering: “Where should my investment property be located?”
If you haven’t yet considered the coastal city of Virginia Beach for your next investment property, 2023 is the time. With its extensive array of desirable locations, thriving industries, some of the top schools in the nation, and diverse population, Virginia Beach (and the greater Hampton Roads area) is uniquely primed for residential real estate investments.
“Location, Location, Location”
If you know anything about real estate, you know that “location” is synonymous with “value”. Very few cities can compare to the value Virginia Beach and its surrounding area intrinsically have to offer real estate investors. For example:
Diverse Beaches (and More!): The beaches along the Chesapeake Bay and Atlantic Ocean are a huge draw for people looking to stay at short-term rentals or long-term rentals - which means year-round business for you. From the touristy boardwalk of the Virginia Beach Oceanfront to the secluded sands of Chic’s Beach and Sandbridge, there’s something for every one of your renters. And there’s more than just beaches; Virginia Beach is home to some incredible state parks and wildlife refuges, not to mention rich historical sites and ample entertainment. Here's a look at the best things to do in Virginia Beach this season!
Proximity to Bases: Virginia Beach and its immediate neighboring cities are home to 16 military bases, including the largest naval base in the world (NS Norfolk). With easy commutes from Virginia Beach, many of the 83,000 military members choose to live off-post while they are stationed in the area.
It’s One of Seven Cities: Virginia Beach is a part of Hampton Roads - a group of seven local cities that includes Norfolk, Chesapeake, Hampton, Portsmouth, Newport News, and Suffolk. Each location has its own distinct feel, meaning that there’s something for everyone in the area.
It’s got the demand.
The numbers don’t lie - Virginia Beach’s large rental population provides steady business for rental properties. About 62% of all residential properties in Virginia Beach are owner-occupied; 33% are renter-occupied, and only 5% are currently vacant or available. With a steady demand for everything from short-term rentals to yearly or multi-family properties, the median rents in Virginia Beach are consistently higher than the national average. The renter demand comes from a variety of sources:
Military: As we mentioned, Hampton Roads is home to 83,000 active-duty military members - which does not include civilian contractors who work on the many local bases. The average military order in Virginia Beach is three to five years, creating a pool of ideal yearly or long-term rental clients and constant demand across the area.
Students: Virginia Beach and the greater region of Hampton Roads are home to several public and private universities, regularly drawing young professionals to the area for education and work opportunities.
Job Market: The shipyards in Norfolk and Newport News alone employ over 30,000 people, and the public school systems in Hampton Roads employ almost 40,000. An Amazon fulfillment center was also opened locally in 2021, another large source of jobs. Healthcare, finance, and research industries are also thriving, regularly bringing new workers to the area.
Tourism: Virginia Beach is the top tourist location in the state, drawing groups and families to short-term rentals near the coast and long term seasonal rentals for the mild weather. Popular events like Live! On Atlantic and Something in the Water continually build momentum for rental properties throughout the area. Renter satisfaction is also easy to foster, as Virginia Beach has been named one of the “happiest cities in America.”
Diverse Population: Virginia Beach attracts a constant influx of ethnic and generational diversity. Young professionals pour into the area for school and business, enjoying the nightlife of Norfolk and fashionable downtown scenes. Families find solace and safety in quiet, residential neighborhoods and nationally-recognized schools for their children. Many retirees settle in Hampton Roads to enjoy the many amenities, mild weather, and strong community that Virginia Beach has to offer.
The opportunities are endless.
Virginia Beach’s size and continual natural turnover make it ripe for all types of investment opportunities. No matter the type of residential real estate investment you are looking for, Virginia Beach has it all:
Yearly Rentals: Single-family homes, condos, and duplexes are the bread and butter of an individual's real estate portfolio. Average rent for yearly rentals is quite high in Hampton Roads, while vacancy rates are historically low.
Multi-family properties: Due to limited space for newly built housing across Hampton Roads, multi-family properties have thrived in recent years. In 2019, the vacancy rate for multi-family properties in 2019 was only 6.2%. Multi-family properties provide the opportunity to produce monthly cash flow while living in one unit and renting the rest.
Short-term vacation rentals: Properties close to Hampton Roads’ beaches thrive as short-term rentals. These fully furnished vacation rentals rent on a nightly basis (minimum of three nights) from April through September. Typically, during the off-season, these properties are rented out monthly as winter rentals. On average, these properties produce 30% more gross revenue than a standard yearly rental.
Note: As of July 2021, City Council made it a bit trickier to get into the short-term rental business in Virginia Beach. Work with local experts to capitalize on this still-lucrative investment opportunity.
Fully furnished rentals: Flexible, fully furnished rentals near hospitals, bases, and major business areas in Virginia Beach (like Town Center) comprise a rapidly emerging market. These properties rent to business travelers, traveling medical personnel, people displaced from their homes, and contractors who do not want to stay in an extended-stay hotel. These properties rent for increased monthly rates for varying amounts of time. These properties can also serve as short-term rentals depending on location and demand.
Fix and Flip or BRRRR: The fixer-upper trend is alive and well in Virginia Beach. Savvy investors have also taken to capitalizing on tax incentives through a 1031 exchange or investment in one of the eight qualified opportunity zones in Virginia Beach.
How to start investing in Virginia Beach real estate?
Whether you are a first-time investor or savvy real estate mogul looking to grow your 100+ unit portfolio, Virginia Beach has every type of real estate investment opportunity. For those new to real estate investing or Virginia Beach, start with these tips to get a piece of the Hampton Roads action:
Start by talking to a real estate consultant to better understand how you can leverage real estate to meet your personal goals. This is a must for those taking their first step into the real estate investment world, and it could save you thousands of dollars.
Get to know the area to see where people are looking for housing, how much properties rent for, and which neighborhoods are poised to appreciate over the long term.
Start your search. For the most accurate and up-to-date information, we recommend using REIN MLS.
Prepare yourself financially. You’ll want to be ready to act quickly when the right deal comes - don’t miss out on your ideal opportunity because your financing wasn’t in order.
THE BOTTOM LINE
The long-term demand for all types of rental properties in Virginia Beach will never go away. Its local and national location make it a prime spot for industry advancements, not to mention the attractions of an East Coast beach town and friendly residential nature.
Investors are shielded by physical space and supply limitations in Hampton Roads; because few new rentals are being built in the area; the value of existing properties is secured for decades to come. No matter if you are looking for a multi-family, duplex, attached, or detached single-family rental, your perfect residential real estate investment is waiting for you in Hampton Roads in 2023.
Contact us at CGP Real Estate Consulting today to get started on finding the perfect property for your investment.
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