Investing · August 16, 2026 · 9 min read
Last Tuesday I sat across from a client—let's call him Jason—who'd just gotten his dream of owning a rental property in Baltimore County absolutely flattened by a $2,047 water and sewer lien that nobody caught until three days before settlement.
Not the title company. Not the seller's agent. Not even the county's own online portal, which showed the account as current.
The lien was old, attached to a different meter number after a subdivision twenty years ago, and it sat there like a landmine. Jason walked. The seller was furious. I spent an entire weekend on the phone with the county trying to untangle it, and by the time we had answers, Jason had already put an offer on a turnkey duplex in Harford County instead.
That's when I decided to write this.
Because if you're thinking about buying your first rental property anywhere in Maryland, Pennsylvania, or DC, you need to know that the stuff that kills deals isn't usually the roof or the HVAC. It's the boring administrative garbage nobody thinks to check.
I spent two decades teaching high school before I became a realtor. One thing I learned: people don't fail because they're dumb. They fail because they don't know which questions to ask.
Most first-time rental investors I work with in Cecil, Harford, Baltimore County, and Anne Arundel have done their homework on cap rates and cash-on-cash return. They've listened to the podcasts. They know what BRRRR stands for. They've run the numbers on a dozen homes for sale in Baltimore County and they're ready to pull the trigger.
But then we get into due diligence and I ask, "Did you check for open permits?" and I get a blank stare.
Or: "What's the zoning designation, and does the county allow short-term rentals in that zone?"
Or: "Have you confirmed the current tenant's lease is actually valid and recorded?"
Crickets.
Here's the thing. Maryland is not a landlord-friendly state compared to, say, Texas or Florida. We have strong tenant protections, mandatory lead paint disclosures if the property was built before 1978, and county-level quirks that will bite you if you're not careful. Over in DC, the rules are even tighter. Pennsylvania is a mixed bag depending on whether you're in York County or Lancaster.
So let me walk you through the due diligence checklist I actually use with investor clients, the one that goes beyond Zillow and the MLS photos.
Start here. Seriously.
In Baltimore County, Anne Arundel, Harford, and Howard counties, unpaid water and sewer bills can turn into liens that survive settlement and become your problem. Some counties will show them on the title report. Some won't.
Call the county directly. Get a lien certificate in writing. If the property has been through a foreclosure or estate sale, triple-check everything. I've seen $400 water bills snowball into $4,000 headaches because interest and penalties compound.
In DC, WASA (DC Water) liens are especially sticky—they can attach to the property even if the seller swears the account is current.
This one comes up all the time in Baltimore City. A seller finishes a basement, adds a bathroom, turns a single-family into a duplex—doesn't pull permits. You buy it. The city finds out during a rental inspection. Now you have to bring it up to code or rip it out.
Check the local permit portal:
If there's an open permit from 2003 for a deck that was never inspected, you inherit that liability.
Let's say you want to house-hack a duplex in Bel Air or buy a single-family in Dundalk and rent out rooms. Does the zoning allow it?
Harford County, for example, requires a rental license for most non-owner-occupied properties. Baltimore County has different rules depending on whether you're in an R-2, R-4, or R-6 zone. Anne Arundel has been cracking down on short-term rentals in waterfront communities.
If you're looking at properties in Prince George's County or DC, the zoning codes are even more granular. Don't assume. Check the zoning map, call the planning department, and if you're serious, pay a zoning attorney $300 to write you a letter. It's cheaper than a $10,000 mistake.
Maryland takes lead paint seriously. If you're renting to families with young children and the property was built before 1978, you need a Maryland Department of the Environment (MDE) lead certificate—either a Full Risk Reduction, Lead Free, or Limited Risk Reduction certificate.
No certificate? You can't legally rent it in Baltimore City or most surrounding counties until you get one. The inspection costs $400–$800. Remediation can cost thousands.
I've had clients back out of deals in Baltimore City when they realized a "great deal" on a 1920s rowhouse would need $15,000 in lead abatement before they could rent it.
If you're buying an occupied rental, request a copy of the lease before you go to contract. I mean the actual signed lease, not a verbal summary from the seller.
Check:
In Maryland, if you buy a property with a tenant in place, you generally inherit that lease. If the tenant is paying $200 below market and has 18 months left, your cash flow just took a hit.
Plenty of townhomes and condos in Howard County, Montgomery County, and Anne Arundel are investor-owned. But some HOAs cap the percentage of units that can be rented. Others require landlord approval or charge higher fees for non-owner-occupied units.
I worked with a client who bought a condo in Columbia, Maryland, assuming she could rent it out immediately. The HOA had a 25% rental cap and a waitlist. She had to live in it for a year before a slot opened up.
Read the HOA docs. All of them. Or hire an attorney who will.
If you're planning to house-hack—live in one unit, rent out the others—you can often qualify for an FHA or conventional owner-occupied loan with as little as 3.5% down, even if it's a duplex or triplex.
But your lender will want to see lease agreements or a signed letter of intent from future tenants to count that rental income toward your debt-to-income ratio. If you're buying vacant, some lenders will use 75% of fair market rent based on an appraiser's opinion.
I'm not a lender, but I work closely with a few good ones licensed in Maryland, DC, and PA. If you're serious about investing and need a referral, reach out.
One more thing: if you're buying a non-owner-occupied investment property, expect at least 15–20% down, a higher interest rate (often 0.5–0.75% above owner-occupied), and stricter underwriting. As of mid-August 2026, rates for investment properties are hovering around 7.2–7.5%, even though owner-occupied mortgages have dipped closer to 6.67% according to Freddie Mac's Primary Mortgage Market Survey.
Maryland's landlord-tenant laws are tenant-friendly. That's not a bad thing, but you need to know the rules.
I've seen new landlords get absolutely steamrolled because they didn't understand Maryland's notice requirements or fee restrictions. The Maryland REALTORS® association has good resources, and the Maryland Attorney General's office publishes a free landlord-tenant handbook. Read it.
I get this question every week. The honest answer is: it depends on your strategy.
If you want cash flow, look at Baltimore City rowhomes or older homes in Harford and Cecil counties. You can still find properties under $200K that rent for $1,500–$1,800/month. Run your numbers carefully (remember those water bills), but the math can work.
If you want appreciation and are willing to accept lower cash flow, Howard County and parts of Montgomery County near the Metro are strong. Expect to pay more upfront, but the tenant pool is stable and property values have been climbing, as I noted in my August market update.
Anne Arundel County is a middle ground. Rental demand is strong near Fort Meade and Annapolis, and you're close to both Baltimore and DC job markets.
York and Lancaster counties in Pennsylvania are sleepers. Prices are lower than Maryland, and if you're buying near growing towns like Hanover or Ephrata, you can find solid returns. Just make sure you understand Pennsylvania's landlord-tenant law—it's different from Maryland's.
New Castle County, Delaware, is another option, especially near Newark and the university. Student rentals are their own beast, but the demand is there.
Remember Jason, the guy who walked from the Baltimore County deal?
He ended up buying a duplex in Bel Air. We did our homework. Pulled permits, checked zoning, requested estoppel letters from the water company and the county, reviewed the tenant leases, got a lead certificate, and hired a landlord attorney to review everything before we went to contract.
Closing took 45 days. No surprises.
He moved into one unit, rented the other for $1,650/month, and his actual out-of-pocket housing cost after the rental income is around $430/month.
That's what good due diligence looks like.
It's boring. It's tedious. It involves phone calls to county bureaucrats who may or may not call you back. But it's also the difference between building wealth and losing your shirt.
If you're thinking about buying a rental property or house-hacking anywhere in Maryland, DC, Pennsylvania, or Delaware and you want a realtor who'll actually walk you through this stuff instead of just unlocking doors, I'm here. I've been doing this since my teaching days ended, and I still think of every transaction as a lesson plan.
Check out my current listings or drop me a line. Let's make sure your first deal doesn't turn into a $2,000 surprise.
Katrina Kirton Sherrod, REALTOR® · Samson Properties · Licensed in MD, DC, PA & DE · 443-616-9770 · Katrina@kkstherealtor.com
“Location, location, location — the only real estate advice that has never once needed a market update.” — Old broker wisdom