Thinking about an Alexandria condo as a home or rental and wondering if it will actually cash flow? You are not alone. Between HOA dues, city taxes, insurance, and shifting market demand, the numbers can surprise you. This guide shows you what to count, how local rules affect income, and a simple way to model cash flow so you can buy with confidence. Let’s dive in.
Alexandria condo cash flow basics
Market trends to watch
Recent regional forecasts point to rising condo inventory and softer condo sales relative to single-family homes, with price growth that is modest for many condo buildings. That combination gives you more choice and negotiation leverage, but it can also cap short-term rent and price gains. Review the latest Northern Virginia Association of Realtors outlook for context on inventory and pricing in 2024–2025. NVAR’s midyear forecast highlights these shifts.
Rents in the D.C.–Arlington–Alexandria area have trended higher over the last several years, which supports demand and helps offset rising costs. Axios reported notable rent growth across Northern Virginia. Even so, your building’s HOA fee and taxes often decide whether the unit cash flows.
Neighborhood variation matters
Old Town, Potomac Yard, Eisenhower Valley, Del Ray, and Arlandria each have different price points, rent levels, and HOA norms. Transit access, building age, and amenities shift both rent potential and monthly costs. Expect tighter yields in amenity-rich or transit-proximate buildings and better gross yields in older or fringe communities.
Your monthly costs that drive cash flow
HOA fees and what they cover
Condo fees typically fund common-area upkeep, reserves, master insurance, and amenities. In Alexandria, many buildings fall in the $300 to $1,000+ per month range depending on age, amenities, utilities included, and parking. For example, building pages in Old Town show fees from roughly the mid-$400s to around $1,000 per month. Review the specific HOA disclosure for exact inclusions. See what condo insurance and master policies usually cover in this U.S. News overview, and check a local building example for fee ranges on Homes.com.
Alexandria property taxes
Alexandria City’s current real estate tax rate is $1.135 per $100 of assessed value (about 1.135 percent). On a $300,000 assessment, that is about $3,405 annually. The city bills twice per year, typically mid-June and mid-November. You can confirm rates and due dates on the City of Alexandria real estate tax page.
Insurance for condo owners
Your association carries a master policy for the building. You generally still need an HO-6 policy for interior improvements, personal property, liability, and loss-assessment coverage. What the master policy covers (bare walls, single-entity, or all-in) determines how much HO-6 coverage you need, which affects your monthly cost. Learn the basics in this U.S. News guide, then confirm details with the building’s master policy declarations.
Management, maintenance, and vacancy
If you plan to rent long term, budget professional management at roughly 8 to 12 percent of monthly rent in the Arlington–Alexandria area. Short-term rental managers often charge 20 to 30 percent of gross revenue. Include an allowance for vacancy (5 to 10 percent) and a maintenance or capital reserve (commonly 5 to 10 percent of gross rent) so you are not surprised by routine repairs. Typical fee ranges are outlined by HomeGuide’s local overview.
Utilities and other owner costs
Some HOAs include water or gas in the dues. Others do not. Plan for any owner-paid utilities, internet if you provide it, parking fees, routine repairs, and periodic capital items. The HOA disclosure will spell out inclusions and any upcoming changes.
Special assessments and reserves
Thin reserves can lead to special assessments for major projects such as roofs, facades, or mechanicals. A large assessment can wipe out cash flow quickly. Always review the reserve study, recent budgets, and board minutes for signs of deferred projects and planned increases.
Rules and financing that change the math
Short-term rental registration and taxes
Alexandria allows short-term rentals with annual registration and requires you to collect and remit applicable state sales taxes and local transient lodging taxes. You must also follow occupancy and local-contact requirements. These taxes and compliance steps reduce net nightly revenue and should be part of your model. Review the city’s transient lodging tax and STR guidance.
Income taxes and depreciation
At the federal level, rental income and expenses are reported on Schedule E, and residential rental property is depreciated over 27.5 years under MACRS. Depreciation lowers taxable income and affects after-tax cash flow. Specific rules, including personal-use limits and the mid-month convention, are covered in IRS Publication 527. Virginia income tax also applies to net rental income.
Warrantable vs. non-warrantable condos
Financing costs depend on project eligibility. Buildings with high investor concentration, hotel-like features, litigation, or ongoing developer control can be ineligible for conventional agency financing. Non-warrantable status can mean higher rates or bigger down payments, which raises monthly costs. See Fannie Mae’s list of ineligible project features.
HOA rental rules
Even if the city allows short-term rentals, your condo association may not. Rental caps, minimum lease terms, and approval processes are common. Always confirm the governing documents before assuming rent income.
A simple cash flow model
Step-by-step
- Start with gross monthly rent.
- Subtract vacancy to get effective gross income.
- Subtract operating expenses: HOA dues, property tax, insurance, management, maintenance reserve, owner-paid utilities, and expected assessments. This yields Net Operating Income (NOI).
- If you finance, subtract monthly principal and interest to get pre-tax cash flow.
- For cap rate, divide annual NOI by your purchase price. For cash-on-cash, divide annual pre-tax cash flow by your initial cash invested.
Example: long-term rental in Alexandria
Example assumptions for a typical mid-rise unit:
- Purchase price: $350,000. Down payment: 25 percent. Loan: $262,500.
- Gross rent: $2,200 per month. Vacancy: 7 percent. Effective rent: about $2,046.
- HOA: $500 per month. Property tax: about $331 per month given 1.135 percent. Insurance: $90 per month.
- Management: 8 percent of rent (about $176). Maintenance reserve: 5 percent of gross rent (about $110).
Monthly math (rounded): effective rent $2,046 minus expenses of $500 + $331 + $90 + $176 + $110 equals NOI of about $839 per month. Annual NOI is about $10,068. With a typical 30-year loan in today’s market, estimated monthly principal and interest on $262,500 would likely exceed $1,600, which turns this example negative before taxes. The takeaway is clear: in many Alexandria buildings, HOA dues and taxes are the swing factors that make or break cash flow.
What about short-term rentals
Prime Old Town and river-adjacent locations can command higher nightly rates. Factor in platform fees, higher cleaning and turnover costs, management fees in the 20 to 30 percent range, registration steps, and local transient lodging taxes. Many associations limit or prohibit short-term rentals, so confirm building rules first. Review city requirements here: Alexandria transient lodging and STR rules.
Due diligence checklist
- HOA package: declaration, bylaws, rules, budget, reserve study, and the last 12 to 24 months of board minutes.
- Master insurance: get the declarations page to confirm what is covered and the deductible.
- Building health: recent or pending special assessments and capital projects.
- City items: STR registration steps and tax remittance if you plan short-term use. See Alexandria’s lodging tax page.
- Financing: confirm project eligibility under Fannie Mae criteria before you quote rates.
- Rent comps: same-building and nearby rentals, typical lease terms, and observed vacancy trends.
Final thoughts
A condo in Alexandria can be a great home and, in the right building, a solid investment. The key is to price in HOA dues, city taxes, insurance, and realistic rent, then verify building rules and financing options. If the first pass looks tight, negotiate on price or target buildings with lower dues or stronger rent potential.
If you want a building-by-building screen or a quick model on a specific unit, connect with Peter Maser. You will get straightforward numbers, neighborhood context, and a plan to move forward with confidence.
FAQs
Are Alexandria condos cash-flow positive today?
- Many are not on typical financing because HOA dues, taxes, and mortgage costs are high, though lower-priced units or low-fee buildings can work if you buy right.
What are typical HOA dues in Alexandria?
- Many buildings range from about $300 to over $1,000 per month depending on age, amenities, and utilities included.
What is Alexandria’s current real estate tax rate?
- The city rate is about 1.135 percent of assessed value, billed in two installments each year.
Can I run a short-term rental in a condo?
- The city allows registered STRs with lodging tax remittance, but many associations restrict or prohibit them, so confirm both city rules and building bylaws.
What makes a condo non-warrantable?
- High investor ownership, litigation, hotel-like programs, or ongoing developer control can make a building ineligible for standard agency loans, which affects your rate and down payment.
