This metropolitan area - the most affluent per capita in the country - is turning into one of the nation's hottest markets for small-scale residential investment.

Home owners who have lived here for five to 10 years or more, while property values zoomed 100 to 150 per cent, are pumping their savings and investment dollars into local real estate.

Metropolitan Washington savings and loan associations, financiers for the bulk of residential properties in the area, report that local investor interest in single-family houses "borders on the astoundings," as one lender put it.

some S&Ls, like Jefferson Federal and Eastern Liberty Federal, find that as high as 25 to 30 per cent of mortgage loan demand this year has been by people who want to buy and rent out single-family houses in the city and nearby suburbs.

During some weeks this fall, small-scale investor loan requests have been outstripped regulard home finance applications by margins of two to one in at least one downtown S&L.

Virtually all of this demand, according to Ed Myers, vice priesident of Jefferson Federal, is "from individuals who lived in the area who see local real estate as one of the few exceptional speculative investments left. If they purchase wisely and the economy stays on its present course, it's true that they can make a bundle in two to five years."

These buyers, who tend to have $8,000 to $15,000 to sink into a property, are seeking tax shelters against their current income as well as annual capital appreciations ranging anywhere from 6 to 12 per cent.

What is particularly eye-opening, Myers adds, is that the prevailing commercial mortgage rates for such investors - currently 9.5 to 10 per cent with one or more discount "points" up front - really don't seem to bother them at all.

"The rates could go a point or two higher, I suspect, and many of these investors would still have enough confidence in the appreciation rates in the Washington area to continue buying," he said.

Members of the real estate industry and local government officials have little hard statistical data on just how many units are being sol here for investment or speculation, but they're convinced the market is strong and getting more so.

That goes not only for trendy in-town neighborhoods such as Logan Circle, Adams Morgan and Capitol Hill, but for lesser-known, more staid investment targets that include sections of Bethesda, Wheaton, Silver Spring and elsewhere in in the suburbs.

One advisor to small-scale real estate investors here, tax counsel Thomas F. Belcher of Kensington, says the prime "pocket" of investment by his clients has been close-in Montgomery County, where more than 100 single-family units have been purchased for that reason in the past years.

Some local investors "like the risk and challenge of more speculative areas" in downtown D.C., he noted, but most of his 500 or so local real estate clients prefer suburban neighborhoods. The majority of the units cost $65,000 or under, are located inside the Beltway, bring monthly rentals of up to $450, and are professionally managed for their owners by local real estate firms.

Belcher says that many of the people he has worked with on such acquisitions "have realized returns of 25 to 70 per cent per year" on capital invested - a yield he feels renders the stock market a singularly noncompetitive alternative.

D.E. Winslow of Bethesda, who heads an informal, 400-member club of Washington area residents and realty investors, says that some of his associates have done even better by buying into more exotic ventures - such as mobile home parks and packages of housing units in marginal neighborhoods.

"Washington is ideal for investments like this," he said. The area's economy is solid, stable, and buttressed by the U.S. Treasury. It has work force with an unusually high income as well as a higher-than-typical propotion of two-worker households.

Add to that a high demand for rental properties, created by short and medium-term employment assignments, "and you've got what often adds up to a very good investment climate," Winslow said.

"There's nothing arcane about buying houses here," he added. "It's very secure, very straightforward, and a smart thing to do if you can."

Not everyone in the real estate field is quite as enthusimastic about investment potentials and patterns however.

Henry E. Nichols, vice chairman of Columbia Federal Savings and Loan Association and a past president of the Washington Board of Realtors, says that, despite the increasing investment activity, "my watchword for people is caution."

Washington residential real estate "is by no means always a sure thing," he warns. "Single-family properties can provide very good returns, but they can also be disastrous for an amateur who doesn't know what he's doing. ANd let's face it - most people are in that category."

Next week: A close look at the financial anatomy of some single-family residential investments in Washington.

Kenneth R. Henry is managing editor of the Housing and Development Reporter, published here by BNA, Inc.