Real Estate Investing in Potomac, Maryland (20854)
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Should you buy in 20854 (Potomac, MD)? Our answer, based on the numbers below.
Mixed — home prices are stretched relative to local incomes. Run the math on your specific situation.
A middle-of-the-road market. Workable, but the best opportunities may be nearby ZIPs rather than this one.
No major risk flags on the data we track.
What’s happening in Potomac, MD (20854)?
Click any question — our AI will research it live from the web and show you sources.
Market Analysis: 20854 Potomac
Not every below-median market is a bargain. Potomac's 20854 ZIP registers signals that favor experienced operators who can absorb the risk $1.3M pricing implies.
Rent of $4,589/mo on a $1.3M basis reads well until vacancy, delinquency, and capex enter the model. The honest cap rate in 20854 sits below the stated 0.0% once reality is priced in.
Nearby ZIPs in Potomac have seen price recovery that 20854 has not matched. Montgomery County data supports the view that the spread is structural rather than temporary.
A resilient renter share of 10% in 20854 is not, on its own, a problem — but paired with below-average income and high mobility, it changes the operating playbook.
appears to the ZIP is not uninvestable, but it is unforgiving. Section 8 landlords, local operators, and specialized value-add funds are the investor types that tend to succeed.
Here's what matters if you're considering buying a home in Potomac:
Property Strategy for 20854
Which property type performs best in this market?
📊 Compare All Property Types →
| Type | Median Value | Est. Rent | Cap Rate | 5yr CAGR | $/Bedroom |
|---|---|---|---|---|---|
| 2BR | $904,248 | $3,370 | 2.7% | +5.0% | $452,124 |
| 3BR | $857,233 | $4,250 | 3.6% | +4.9% | $285,744 |
| 4BR | $1,160,654 | $5,000 | 3.1% | +6.1% | $290,163 |
| 5BR | $1,614,589 | — | — | +6.9% | $322,918 |
Market Trends
Home Value History (with trend line)
Rent History (with trend line)
📊 How Does 20854 Compare?
| Metric | 20854 | Potomac | Maryland |
|---|---|---|---|
| Home Value | $1,287,709 | $1,287,709 | $424,997 |
| 5-Year CAGR | 3.9% | 3.9% | 4.9% |
| Avg Rent | $4,589 | $4,589 | - |
| Cap Rate | 2.8% | 2.8% | - |
Similar ZIPs Within 25 Miles
Compare other nearby markets to see if a neighbor offers a better fit.
Landlord Ground Truth
Real numbers from people who own or manage rentals in ZIP 20854 (Potomac, MD). Anonymous, moderated, never written by AI.
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Property managers serving Montgomery County
Manage rentals here? List your business →American Community Management provides community association management and HOA services across Maryland, Virginia, and D.C. summary from their website
Iko Community Management provides HOA and community association management services in Columbia, MD and Suburban Maryland. summary from their website
Melan Property Management delivers proactive property management solutions for multifamily and commercial real estate across Maryland, Washington D.C., and Miami. summary from their website
Listings are shown for convenience — Repit doesn’t endorse or vet these companies. Ratings shown come only from email-verified visitors.
📊 Market Snapshot
| Home Value | $1,287,709 |
| Monthly Rent | $4,589 |
| Price-to-Rent | 23.4:1 |
| 1% Rule | ✗ Fails |
💰 Return Metrics
| Gross Yield | 4.3% |
| Cap Rate | 2.8% |
| 5-Year IRR | 6.7% |
📈 Home Appreciation
| 1-Year | +2.1% ▲ |
| 3-Year CAGR | +3.3% ▲ |
| 5-Year CAGR | +3.9% ▲ |
| 10-Year CAGR | +3.7% ▲ |
🏠 Rent Trends
| 1-Year | +4.9% ▲ |
| 3-Year CAGR | +5.4% ▲ |
| 5-Year CAGR | N/A |
The current 30-yr mortgage rate (6.8%) exceeds the estimated cap rate (2.8%). Financing reduces your cash-on-cash return below the cap rate. Markets like this may still make sense as IRR plays — factoring in appreciation, depreciation, and a future refinance when rates drop.
Run an IRR Analysis →⚠️ Risk Signals
Composite view of factors that can impact a ZIP's stability and your downside risk.
Demographics in 20854
Population: 49,694
Crime & Safety
Crime & Safety Data Coming Soon
We're integrating comprehensive crime statistics including violent crime rates, property crime, and safety scores to help you make informed investment decisions.
Expected: Q1 2025
🎓 Schools in 20854
Schools in This ZIP Code
About Repit School Scores
Traditional school ratings rely heavily on standardized test scores, which often reflect family income more than school quality. Repit takes a different approach.
We evaluate schools based on factors that research shows actually impact educational outcomes:
- Class Size — Smaller classes mean more individual attention
- School Funding — Resources available for programs, staff, and facilities
- Community Factors — Neighborhood characteristics that influence student success
- School Environment — Size, type, and structure
Scores are updated annually using federal education data.
🎓 Nearby Colleges & Universities
Investor Insight: With 3,271 students living off-campus nearby, this area has strong rental demand from the college population.
Frequently Asked Questions
What do landlords charge for rent in Potomac, MD?
Potomac, MD rentals go for roughly $4,589/mo a month. That puts gross yield in solid territory relative to $1.3M acquisition costs.
What approach is best for Potomac, MD real estate?
Investors usually favor careful cash-flow rentals with hands-on management in Potomac, MD. With home values at $1.3M and rents near $4,589/mo, other strategies can work but produce measured rather than outsized returns.
What kind of market is Potomac, MD for investors?
Potomac, MD clocks in at an investability rating of 3.0/5, with median home values near $1.3M and average rents around $4,589/mo. That combination puts it in the healthy tier for investor interest.
How landlord-friendly is Potomac, MD?
Rental owners in Potomac, MD deal with a landlord-friendly legal framework. Most standard eviction processes run on reasonable timelines.
Do rentals sit vacant long in Potomac, MD?
Potomac, MD carries elevated vacancy risk. Expect steady absorption at market rents of $4,589/mo.
You know 20854 now. You don’t know where it ranks.
This page stays free — all of it. What one page can’t tell you is how 20854 compares to every other market. Investor ($19/mo) screens every U.S. ZIP by cap rate, the 1% rule, vacancy and landlord climate, and exports your shortlist.
How 20854 ranks in Washington-Arlington-Alexandria, DC-VA-MD-WV
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