Arlington County

Arlington's headline numbers tell a clear story before you run a single line of the underwrite. At a median home price of $802,232 and median rent of $2,680, the gross rent-to-price ratio sits at 4.0%, which is thin by any cash-flow standard. The modeled cap rate of 2.61% confirms it: after a 20% down payment ($160,446), a 6.85% mortgage generates a monthly payment of $4,205, and when you stack $938 in estimated expenses on top, the property bleeds $2,464 per month. That's a cash-on-cash return of negative 16%. Appreciation is doing the heavy lifting here, with year-over-year home price growth of 1.28%, and the appreciation score of 63 out of 100 is the only category where Arlington earns above-average marks. Cash flow scores a 30, affordability a 7. This market sits firmly at the appreciation end of the spectrum, and the numbers leave no ambiguity about it.

Given those figures, Arlington is not a market for the cash-flow buyer or the value-add operator looking to manufacture yield through renovation. The negative $2,464 monthly cash flow means you are writing a large check every month and betting on long-run price appreciation and rent growth to make the return work over time. That bet isn't irrational in Arlington, but it requires deep reserves, a long hold, and genuine conviction that the structural demand drivers sustaining prices in the $800,000 range will persist. The buyer this market suits is someone allocating capital to a wealth-preservation or appreciation-driven strategy, likely with significant equity from another asset to deploy, who can absorb carry losses without distress.

The economic foundation underneath Arlington's pricing is unusually durable. The county sits inside the Washington, D.C., metro, directly adjacent to the federal government's largest concentration of agencies, contractors, and defense-related tenants. Federal employment and the contractor ecosystem it sustains create a renter base with above-average income stability and low sensitivity to private-sector cyclicality. That demand floor is a real underwriting input, not a marketing talking point, because it helps explain why a $2,680 median rent holds even at price levels that make ownership unaffordable for most households (affordability index of 7 out of 100). When ownership is effectively priced out for a large share of the population, rental demand doesn't disappear, it gets locked in. The economic note in the data supports this directly: proximity to D.C. and the federal contractor base are the anchors sustaining rental demand.

On carry costs, the combined monthly tax and insurance estimate of $702 is already baked into the $938 expense figure in the model. Virginia's state-average effective property tax rate of 0.82% is flagged as normal, which is accurate relative to the national distribution, and it's worth noting that this is a state-average estimate, with actual Arlington County rates potentially differing from that figure. At 0.82% on an $802,000 asset, you're looking at roughly $6,578 annually in property tax alone, plus $1,845 in insurance, before maintenance, vacancy, management, and capital expenditure reserves. None of those line items shrink the already-negative cash flow. The tax rate itself is not an outsized problem by Virginia standards, but it's not a tailwind either, and at this price point the absolute dollar amounts are large enough to deserve their own careful review in your underwrite.

The primary risk here is price-level concentration. At $802,000 median, the buyer pool for any exit is narrow, and liquidity events in a rate-elevated environment can be slow and price-sensitive. The overall score of 39 out of 100 and a national percentile ranking of 3rd out of 1,000 counties reflect exactly this tension: a high-quality, high-demand location that simply doesn't pencil as a cash-flow rental at current price and rate levels. There are no vacancy or crime statistics in the provided data to cite, but the structural risk is entry price and rate sensitivity, not demand.

Compared to the neighboring markets in the data, Arlington is the most expensive and the worst-scoring. Fairfax City comes in at a $755,224 median with a rent-to-price ratio of 3.89%, an overall score of 46, and a slightly worse gross yield than Arlington's 4.0%, though the score advantage is marginal. Rappahannock County at $553,653 scores a 50 overall. Buchanan County ($74,741, score 47) and Brunswick County ($130,410, score 47) sit at the opposite end of the price spectrum with meaningfully higher scores. You would choose Arlington over these neighbors for exactly one reason: you believe the long-term appreciation and demand stability of a D.C.-adjacent, supply-constrained urban market outweighs the cash-flow deficit and higher entry cost. If your mandate is yield, any of the lower-priced Virginia counties in this comparison set will outperform Arlington on a cash-flow basis, and several do so with better overall scores. Arlington is a deliberate trade of current income for location quality and demand permanence, and you should underwrite it with that trade fully priced in from day one.