Lancaster, PA · Member since 2015 · 24 posts · 1 vote
so we are looking to buy and hold as newbies in lancaster pa. checking the listings and estimating rehabs. we are finding it hard to find cashflowing properties... I mean we are very new but the basic revenue minus expenses doesnt seem to cash flow much at all if at all. plus pulling from equity of our home would just completely eliminate cashflow. tried to sell our home aswell and the market kind of dropped. so would that mean its time to buy in our market? anticipating an incline?
Investor · Lancaster, PA · Member since 2014 · 53 posts · 60 votes
11y
Don't expect to find a 2% rule property in Lancaster. If you buy off the MLS, your ideal will be a 10% cash-on-cash return. It is a very stable market though and you will not see huge swing in prices - up or down.
Beware if you start looking at cheaper properties in the city - they are usually older homes, so make sure you are counting the big expenses like roof, hvac, plumbing that will occur over the years.
Investor · Bonita Springs, FL · Member since 2015 · 102 posts · 37 votes
11y
Lancaster County as a whole is at an extremely high point right now. It is also one of the most competitive markets in the country currently. I know this sounds ridiculous and I laugh every time I think about it as a reality. The rental rates are also not sustainable at their current rates, so don't go into a deal expecting those rates to be standard. With regards to the 2% rule so many speak of one here, thats extremely unrealistic in anything other than "cheap" (slumlord) housing. If you want to make money on the front end and back end it is much more complex than a simple percentage and differs property to property.
If you are still feeling an urge to buy something for investment purposes, follow the Amish. I know that sounds ridiculous but a bunch of the Amish have been buying up some of the worst streets and trying to turn them around as an investment strategy. What is even funnier is that I didn't know Amish were even allowed to own property that they rented to "outsiders".
What is even funnier is that I didn't know Amish were even allowed to own property that they rented to "outsiders".
The Amish are very, how should I say... tourist-y? They need to make money to cover things like hospital visits because they don't carry any type of insurance. Yes, they make many of their own food and clothing products but they buy the supplies at Wal-Mart! It's an interesting culture to say the least....
Rents have moved up this year, that's a positive. I'm only buying about 25% of my acquisitions from the MLS, the rest are "off market". You need to scrutinize every purchase for its desirability.
There is a REI (Real Estate Investment) group that meets 3rd Thursday at Lancaster Bible College at 7 PM. Its free and there are other investors there that you can meet and learn from. The name of the group is REIMG and they have a Meet Up page. I go to almost every meeting.
Investor · Lancaster, PA · Member since 2015 · 10 posts · 3 votes
11y
Lancaster's average cap rate for small investment has been narrowing in the last 2 years, as competition and prices go up. Rents are also going up but not with the pace of housing prices. So I would say on AVERAGE you're looking at around 7% cap rates currently, which is ok, but not amazing. There were more value add opportunities in the desired west end and downtown a few years ago. Those have largely dried up. And regarding the Amish, I would NOT follow the Amish for a few reasons... 1) the Amish are not looking to improve communities, as they are not part of the city community. Minimal investment and return are really their only goals in my experience (not that these shouldn't be on their list, but they tend to be the only goals). 2) they don't live in the city so they don't know the city as well and just tend to buy where prices are low. 3) the quality of work done on their properties tends to be a little below the average investor quality, so honestly I feel as a group they pull value and rents down where they invest, rather than the opposite.
There are plenty of us out there who DO care about community focus and try to affect positive change. I've been investing (slowly) for the last 10 years in Lancaster city and I do feel it is still a great place to live and there are some good opportunities, but they are getting hard(er) to find. If you are interested in investing in Lancaster city, I would recommend doing your homework first to find the areas of town where you would be comfortable living and focus the search there. Just my 2 cents!
Lancaster, PA · Member since 2015 · 24 posts · 1 vote
11y
wow thats good information.. kind of what ive been noticing... good to know there are still good opportunities in my home area. i do intend on attending the 17ths meeting to learn more so thanks for the invite. what is this 2% rule?