Bronx, NY · Member since 2015 · 53 posts · 10 votes
I'm a newbie investor out of Brooklyn, NY. The market is way over priced for me to get started. However, I've looked at properties in Reading, PA and found that you can buy incredibly cheap. Has anyone invested in Reading? Investing out of state could be more beneficial for a newbie. Any advice?
I organize the largest local meetup group in Berks County- Reading, PA. I HIGHLY recommend you touch base with people in our group prior to investing there. The returns look great on paper-- but as with anything.. stuff that cheap comes with its risks. HIgh turnover, high vacancy, difficult tenant population.. the list goes on. YES I own stuff in Reading so I am speaking from experience. Side note as well-- some of the agents and investors LOVE people from NY and NJ and will intentionally market to them to sell a "deal" that isn't really a deal but looks like a deal to an out of state investor. A lot of people will outright say when they can't sell something: market it to NY and NJ buyers. SOoooo.. buyer beware! The best thing you can do is know the neighborhoods and get yourself to Berks to connect with good people at the local meetup groups.
I am originally from PA and it is a great place to invest for both flips and rentals. My investments are currently in Philly (check out properties there, it's one of the hottest markets). However, Reading is a great place to start due to it's close proximity to NY. Here's a list of other places in PA the look into: Lancaster, Allentown, Pottstown, Harrisburg, Coatesville and Upper Darby
There are many good places to invest in PA as previous posters have mentioned. I would go take a weekend and drive through some areas if you can to see the types of areas we have here. If you are liking them, definitely make a trip to meet with some property managers in the areas you are choosing. I would not want to self manage with the commute from brooklyn to anywhere in PA
I organize the largest local meetup group in Berks County- Reading, PA. I HIGHLY recommend you touch base with people in our group prior to investing there. The returns look great on paper-- but as with anything.. stuff that cheap comes with its risks. HIgh turnover, high vacancy, difficult tenant population.. the list goes on. YES I own stuff in Reading so I am speaking from experience. Side note as well-- some of the agents and investors LOVE people from NY and NJ and will intentionally market to them to sell a "deal" that isn't really a deal but looks like a deal to an out of state investor. A lot of people will outright say when they can't sell something: market it to NY and NJ buyers. SOoooo.. buyer beware! The best thing you can do is know the neighborhoods and get yourself to Berks to connect with good people at the local meetup groups.
April Crossley Can you give some details on the meetup group please? I am new and looking to learn as much as possible before diving in to my first property.
Here's the link to the Meetup. I go to the meetings regularly. They are an awesome way to network and learn more about real estate! https://www.meetup.com/Berks-County-Real-Estate-Investing-Meetup/
1. Clearly Philadelphia area is the most populous area. As a result, some of the most expensive real estate in Pennsylvania is located there (just took a look at a vacant land selling for $1.5 million in Philadelphia with a friend). Now Philadelphia has "war zones" and you can buy properties cheaper than what you can buy in other areas. So kind of a wide range there.
2. Pittsburgh comes second. I hear it is pretty hot and that it's a nice place to live. But I never really looked at the area from an investment perspective so I really don't know too much about it to comment.
3. I think Allentown area deserves its own category since it is significantly more populous than the next set of areas. Last time I checked, it was really hot there. Some investors I spoke to think it's too hot. I personally don't have any desire to invest there (for various reasons) but I know many people who found great success.
4. You next have the other "bigger" areas. This includes Harrisburg, Scranton, Wilkes-Barre, Lancaster, York, Hanover, and Reading areas. Local investors can correct me if I'm wrong, but I've always view them as markets that will always average around a 10-cap market rate. Even the smaller multi-families (2 to 4 units) will sell around for that valuation. Each area will have different pros and cons. Some people strongly feel about their local areas (whether good or bad), but I don't know if anyone can definitely argue that one area is better than the other.
5. You then have basically all the other areas. This doesn't mean they are no good. But they are smaller markets and that brings certain challenges.
Hopefully the above shows you the general areas within Pennsylvania. To sum it up, I would say you have: (1) Philadelphia; (2) Pittsburgh; (3) Allentown; (4) the other "bigger" areas; and (5) the rest. You can compare them to see what area appeals to you the most.
Now I do personally think that once you decide on a market, you are better off directing your focus in the area until you hit a critical mass. For example, I would generally rather have 100 units in one area rather than have 100 units scattered all over the state. I'm sure there are many exceptions to this rule, but reaching a certain "critical mass" of units within one area provides you with advantages that you wouldn't otherwise get.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.
@Chris K. and @Jesus Ramirez, As Chris K. said, Pittsburgh is a hot market. I live here and have my whole life, so I know the area and market very well. Where other cities have seen extremely high purchase prices, Pittsburgh is a cost effective alternative with great returns on those investments. Our city has also been dubbed as the 2nd "Silicon Valley" with it's tech influence largely funded by big named companies such as Amazon, Apple and Uber who have set up shop here. As a result of all of these factors and many more, a lot of areas are seeing a revitalization. And neighborhoods are being upgraded to reflect that growth. The trick of course is to get into those areas ahead of the rest, before they explode. Many Investors have asked for assistance in finding those "up and coming" neighborhoods in Pittsburgh. If anyone would like to chat further about what Pittsburgh can offer them, I am here to help....Thanks, Gary
I live in the Poconos, specifically East Stroudsburg. There is a great opportunity here not just for regular rentals but also vacation rentals. A lot of people overlook this area but when you travel interstate 80 from NY and NJ we are the first exit in Pennsylvania. A lot of people rent here and work in NJ and NY due to its close proximity but considerably less cost of living.
I second what @Michael Long said. I live about 45 mins west of East Stroudsburg near Bloomsburg University. There are a lot of great buys from Pocono's on through to Danville, Lewisburg, and even State College depending on the investment type (Long vs Short term rentals or flips).
Many townships in the Pocono's have passed or are passing Code requirement for short term rental properties. The restrictions, fees and taxes would need to be computed into your ROI. Check out the Township requirements prior to buying, avoid surprises.
@John Moore do you have any additional information about the changes coming in the e Stroudsburg area?? I'm currently looking for a property or two in that area and I wasn't aware of any changes coming through the local government.
I own land in PA already but now I'm looking for something in a duplex, triplex or Quad for residence and income purposes.
@John Moore thanks for the info... I've been watching the Lake Harmony area for a potential deal on a lake home for myself. I did not know they were making changes to the short term rentals. Potentially screws up my plans.
right now, the only thing that has been approved is a requirement to acquire a $500 license For the short term vacation rental and this was for Pocono township
@Cesar Tamayo do you have to register in advance to attend the meetup??
You should sign-up and RSVP if you plan to attend. In the summer the networking meetings are at a local bar/restaurant. Most of the others have a max capacity as speakers present valuable info. Hope to see you there!
From what I understand different townships are taking different approaches. Some completly discouragne short term rentals, others require the payment of hotel/motel tax and financial penalties for violations (noise, and occupanc, etc.). Research the requirements for the area you may be interested in.
I'm considering buying a property for short-term rental in Pocono Township area. Does anyone have any connections in this area who might be able to help orient me? I know the $500 license in Pocono Township is very new, does anyone have a sense if this is going to be something relatively straightforward to get, or will it be used as a way to limit short-term rentals. Thanks, happy to have found this board.