I am new to BP and starting to work my way through the volume of information and tools. I am near retirement from the 9-5 and would like to diversify into rental properties. Thinking about Pittsburgh PA to begin with because it is my back yard. Open to any suggestions/partnerships/recommendations, etc. So far this seems like a great community. Looking forward to taking the leap.
I can definitely understand the temptation to do something close to home, but it likely will depend on whether you are planning to manage these properties yourself (which I personally, wouldn't since you are simply just buying yourself a new job) and where the best forecasted ROI is at. Now, granted I'm biased, but let's do a comparison of potential returns between Pittsburgh and Mesa/Gilbert AZ using a $400K property example and forecasted appreciation over the next decade. This can give you a clearer picture of where you might want to put your investment.
Mesa or Gilbert, AZ: A Look at the Numbers
For the Phoenix metro area (including Mesa and Gilbert), the forecasted annual appreciation rate is expected to be around 3.5% over the next 10 years, based on recent trends and projections. If you were to purchase a $400K property in either of these cities today, applying the 3.5% growth rate, that same property would be valued at around $566,000 by 2034. Mesa and Gilbert are growing rapidly due to strong population influx and economic stability, making them particularly attractive for long-term investments.
Why Mesa or Gilbert? These cities are part of the thriving Phoenix metro area, but they also have their unique appeal. Gilbert, for instance, is known for its excellent schools, high quality of life, and strong local economy. It has been drawing in families and professionals, leading to steady demand and higher appreciation rates. Mesa, on the other hand, offers a balance of affordability and access to job opportunities, making it a great option for investors looking to tap into a more budget-friendly market with solid returns.
Pittsburgh, PA: Analyzing Returns
In contrast, Pittsburgh has a slightly different dynamic. The average annual appreciation rate is projected to be closer to 1.5% over the next 10 years, considering its recent performance and overall market outlook. A $400K investment in Pittsburgh would grow to about $463,750 by 2034. While Pittsburgh offers lower entry prices and a more stable rental market, the appreciation potential doesn’t quite match that of Mesa or Gilbert, making it a more cash flow-oriented market rather than one driven by property appreciation.
Why Mesa or Gilbert Might Be the Better Bet
Because of leverage, that roughly $100K difference in appreciation is HUGE because I've had investors just putting 5% into the deal (so a 5x higher roi). If your goal is long-term growth with a balance of rental income and appreciation, Mesa and Gilbert stand out because of their strong job markets, high quality of life, and high rental demand. Both cities are expected to continue seeing strong appreciation due to the steady population growth and economic opportunities in the Phoenix metro area. In comparison to Scottsdale, these areas also offer more affordable entry points, making them ideal for investors seeking a combination of steady growth and manageable upfront costs.
Given the projected numbers, Mesa and Gilbert’s combination of vibrant rental markets, better appreciation, and affordability make them stronger candidates for higher long-term returns compared to Pittsburgh. If you’re comfortable with the Phoenix metro area and want to position yourself in a growing market with high potential, either Mesa or Gilbert could be a solid choice.
Let me know if you’d like to dive into any specific areas or property types within Mesa or Gilbert for a deeper analysis! Happy to help anyway we can
Cheers, Pat
Turning investment visions into reality in Phoenix, AZ - Ranked #1 for residential real estate growth and opportunity by PwC
I greatly appreciate your comments comparing the two locations and agree with everything you said about management as well as location.
I am still getting my feet wet with the BP site and and the information overload, but will keep you in mind for properties in AZ. BTW: I spent some time in AZ, first at Ft. Huachuca, then at the UofA in Tucson. Had some fun times dancing in Phoenix.
Hi Karl, Welcome to Bigger Pockets! Im a agent that deals with off market properties here in pittsburgh. Id love to connect and guide you with any questions you may have!
I am new to BP and starting to work my way through the volume of information and tools. I am near retirement from the 9-5 and would like to diversify into rental properties. Thinking about Pittsburgh PA to begin with because it is my back yard. Open to any suggestions/partnerships/recommendations, etc. So far this seems like a great community. Looking forward to taking the leap.
Welcome to Bigger Pockets, Pittsburgh is a great market for rentals. If you have any specific questions or contacts that you are looking for I'd be happy to help.
Investor · Dallas, TX · Member since 2020 · 104 posts · 43 votes
1y
Welcome! Pittsburgh is a great starting point for investing since you're familiar with the area, but it’s important to make sure the market aligns with your goals. The key is finding a market that fits your strategy—whether that’s cash flow, appreciation, or simply diversification. Feel free to reach out if you want to know more!