Devon, PA · Member since 2016 · 93 posts · 23 votes
Hello,
Calling all investors in South Central PA Market -- Counties of Lancaster, York, Dauphin and Cumberland.
How is the current and future long term buy and hold rental market in this area? Are the rents raising, what is the outlook for 2017 thru 2020? I am in the market for buying multi-family homes of 5+ units.
Very broad questions but I'll take a crack at a partial answer. I'm not in the 5+ unit space yet, so I can't speak to that much.
I would describe south central PA in general as "steady, but boring". But in a good way.
In general, I'm bullish on Cumberland and Lancaster counties. Stronger school districts and steady population and job growth. Cumberland Valley school district is huge and one of the top school districts in the state.
I have a 4 plex in Elizabethtown that's been performing well for me so far. Then there's Mount Joy, which is the next town over closer to Lancaster (city), which is growing quickly. The only city in the region I would consider investing in is Lancaster (so NOT Harrisburg or York). Certain parts of Lancaster have been/are being revived with lots of interest from millennial renters (i.e. hipsters). I think the general rule in Lancaster is north of King Street = good, B+/A-. South of King Street gets pretty sketchy with C and D neighborhoods. (I'm not intimately familiar with the city, so forgive me if this description is too general)
I would suspect most buildings you would look at would be 100+ years old, so expect to need to do some rehab. I would also suspect that cap rates on multi-family are being driven down due to high demand (especially in Lancaster), but it's probably like that in most other attractive markets around the country.
Thanks Kyle for your insight. I have a 5 unit in York Haven that I just purchased and another one under contract in Spring Grove. I am NOT looking to buy in the City, I am looking for the suburbs with average schools. I think Lancaster, York and Harrisburg City schools are not good and also the crime rates are little higher.
I will consider Lancaster and Cumberland for my next purchase.