Out-of-State Investment - Starting Out

[David Fals]

I am looking to purchase my first rental property, but I have encountered multiple roadblocks along the way. Since New York and New Jersey are expensive, I decided to explore options out of state, specifically in Pennsylvania. I have been focusing on regions like Allentown, Easton, Bethlehem, Reading, Pottstown, Lancaster, and recently York.

Most of the properties I’ve been considering are townhomes or row houses. However, I recently started thinking about single-family homes as an option. Initially, I believed investing in multifamily properties would be my best bet for maximizing cash flow and minimizing vacancy risks, but they are scarce and expensive. 

[Melissa Justice]

@David Fals,

Hey David!

You're on the right path by actively exploring multiple markets and being flexible with your strategy, especially in a challenging region like the Northeast.

Here's how I'd approach it based on what you shared:
Multifamily vs Single-Family Homes --
Multifamily: More cash flow if bought right, but you're spot-on that in PA, they’re either overpriced, outdated, or extremely competitive right now.

Single-Family: Less turnover risk, more stable tenants, and easier to finance and manage remotely. They also tend to appreciate better in many submarkets.

If your goal is to actually get started and not sit on the sidelines, a well-located single-family in a stable market is often the better first step, especially if it's updated and can cash flow from day one.

You’re looking in the right areas! Here’s a quick breakdown:
Allentown / Easton / Bethlehem (Lehigh Valley): Growing, strong rental demand. But getting expensive and competitive.
Reading & Pottstown: Still affordable, but neighborhood quality varies street by street. Some cash flow potential.
Lancaster: Great long-term market. Stable economy, low vacancy. Worth serious consideration.
York: Often overlooked but trending upward. Good rents-to-price ratio in the right areas.

If you want the most passive and low-risk option-look for updated single-family homes with low capex in B/B+ neighborhoods in these markets.

Don’t force a multifamily unless the numbers work or you’re getting off-market deals.

Run the numbers on SFRs in York or Lancaster. Make sure they rent well and meet your cash flow targets with 20–25% down.

Build relationships with agents and PMs in 1–2 of these markets. You’ll get better deal flow and local insights than from Zillow alone.

Let me know if you want help analyzing a specific property or sample numbers-happy to walk you through one. You're closer than you think.

Best of luck!