Interest in Rental Properties around Pittsburgh, PA

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Interest in Rental Properties around Pittsburgh, PA

Tyler Mau
Santa Clara, CA · Member since 2018 · 14 posts · 6 votes

Hi everyone,

I'm an out-of-state investor looking to potentially buy a rental property around Pittsburgh, PA. I know some people who live/lived in Pittsburgh, but I would like to see if anyone has advice from an investor's perspective. I've heard that the area near CMU, University of Pittsburgh, and Google's office (East Pittsburgh) is a good rental market, a decent area, and potentially a good place to invest in rental properties. It seems like there is quite a good price:rent ratio in the area, and I've heard that areas like Shadyside are up-and-coming. So based on what I've learned from people from the area, I have a few questions for investors:

  • Is this a good area to invest in rental properties? Are there any other areas that I should maybe look at?
  • Since a lot of properties in Pittsburgh are very old, should I be worried about major rehab work?
  • My colleagues from the area said people are quite accustomed to living in the older places since there's not a lot of other reasonably-priced options. To what extent would it be worth renovating to "modernize" a place for a rental? Will newer renovations affect the rent enough to make it worth the renovation costs? (I know this is a vague question and depends on the extent of renovations, but if anyone has some general advice about this, I would much appreciate it.)
  • I've also heard that there were recently a lot of "luxury" apartments built around East Pittsburgh that now have a bunch of vacancies. It seems that perhaps the prices are too expensive for people to want to live there. Does anyone know how this has affected the rental market recently or if you foresee any problems with occupancy for a rental property in the future?
  • Lastly, does anyone have any suggestions for great real estate agents, property managers, or contractors in the area? I'm looking to put together a good team I can rely on (especially being an out-of-state investor). I foresee buying several properties in the next few years, so having a good team in place would benefit all involved.

Thanks in advance for any advice/suggestions! I am really looking forward to buying my first property in the coming months and expanding to more in the coming years! Please feel free to reach out and connect with me if you would to network and discuss rental property investment! I'm always looking to exchange knowledge with other investors!

Best,

Tyler

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Phil Anderson
Pittsburgh, PA · Member since 2017 · 16 posts · 13 votes
8y

Hi Tyler,

Shadyside isn't exactly what I'd call up and coming - it's been the "rich neighborhood" of Pittsburgh for as long as I've lived here.  It has a mix of college housing and mansions, and is a typical place for older professionals to live, so a mix of lawyers and doctors.  The other areas you mentioned are indeed consistent rental areas because of the universities, but I've personally had a hard time finding values because it's either in multi-generation cash flow dumps in Oakland, or competing with young profressionals for SFHs in Squirrel.

  • Since a lot of properties in Pittsburgh are very old, should I be worried about major rehab work?

Yes - especially housing that has been used as a rental previously, because people do a lot of "weekend handyman" work as cheap as possible (this probably isn't specific to Pittsburgh).

  • My colleagues from the area said people are quite accustomed to living in the older places since there's not a lot of other reasonably-priced options. To what extent would it be worth renovating to "modernize" a place for a rental? Will newer renovations affect the rent enough to make it worth the renovation costs?

In the areas you mentioned anyone who is not a college student would probably be looking for a modernized apartment, it could certainly be a good way to increase the rental rates of an older unit.

  • I've also heard that there were recently a lot of "luxury" apartments built around East Pittsburgh that now have a bunch of vacancies. It seems that perhaps the prices are too expensive for people to want to live there. Does anyone know how this has affected the rental market recently or if you foresee any problems with occupancy for a rental property in the future?

Pittsburgh is kind of weird, within a 3 mile radius you can find rentals going from $300/month to $3000/month - you have to find a niche you want to cater to and do analysis on that cohort.  Vacant $3000/month units aren't affecting $600/month units.

  • Lastly, does anyone have any suggestions for great real estate agents, property managers, or contractors in the area? 

I can PM you a good real estate agent, but honestly still looking for a property manager I like myself (also welcome recommendations from the BP community!)

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  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    8y

    For once, I'm going to do the smart thing for myself on Bigger Pockets.

    Tyler, the future for Pittsburgh is incredibly bright. The city is exploding with possibilities and potential. You should buy now, and buy as much as you can. Tomorrow, the prices all over the city will be out of reach, climbing into the stratosphere. We're seeing major major tech players move in and take up shop in the bleeding edges of urban chic all over the area, turning the city into a major new tech hub. With them have come incredible, paradigm-changing restaurants, a patronage of the arts of a scale unseen since the Gilded Age, a proliteration of changes remaking the city on the most basic levels. This is not your father's Pittsburgh, it's not even your elder brother's Pittsburgh. It's a Pittsburgh born anew ever minute, ever innovating, ever changing, ever different and better.

    Of all the areas of the city projected to grow, grow, grow, you need to look at the Munhall-Homestead area across the river. Between you and me, I've never seen such a thing happen. Homestead is undergoing more than a renaissance, it's as if God Himself has decided to renew the Covenant in that area. But act now, because these savings won't last long! Buy anything at all that you can find on the market, because a tsunami of change is coming to the area.

    0Reply
  • Phil Anderson
    Pittsburgh, PA · Member since 2017 · 16 posts · 13 votes
    8y

    Hi Tyler,

    Shadyside isn't exactly what I'd call up and coming - it's been the "rich neighborhood" of Pittsburgh for as long as I've lived here.  It has a mix of college housing and mansions, and is a typical place for older professionals to live, so a mix of lawyers and doctors.  The other areas you mentioned are indeed consistent rental areas because of the universities, but I've personally had a hard time finding values because it's either in multi-generation cash flow dumps in Oakland, or competing with young profressionals for SFHs in Squirrel.

    • Since a lot of properties in Pittsburgh are very old, should I be worried about major rehab work?

    Yes - especially housing that has been used as a rental previously, because people do a lot of "weekend handyman" work as cheap as possible (this probably isn't specific to Pittsburgh).

    • My colleagues from the area said people are quite accustomed to living in the older places since there's not a lot of other reasonably-priced options. To what extent would it be worth renovating to "modernize" a place for a rental? Will newer renovations affect the rent enough to make it worth the renovation costs?

    In the areas you mentioned anyone who is not a college student would probably be looking for a modernized apartment, it could certainly be a good way to increase the rental rates of an older unit.

    • I've also heard that there were recently a lot of "luxury" apartments built around East Pittsburgh that now have a bunch of vacancies. It seems that perhaps the prices are too expensive for people to want to live there. Does anyone know how this has affected the rental market recently or if you foresee any problems with occupancy for a rental property in the future?

    Pittsburgh is kind of weird, within a 3 mile radius you can find rentals going from $300/month to $3000/month - you have to find a niche you want to cater to and do analysis on that cohort.  Vacant $3000/month units aren't affecting $600/month units.

    • Lastly, does anyone have any suggestions for great real estate agents, property managers, or contractors in the area? 

    I can PM you a good real estate agent, but honestly still looking for a property manager I like myself (also welcome recommendations from the BP community!)

    2Reply
  • Tyler Mau
    OP
    Santa Clara, CA · Member since 2018 · 14 posts · 6 votes
    8y

    @Jim K. Thank you for that incredible description of Pittsburgh's growth! :) I've heard similar things (though, not with such great metaphors) about Pittsburgh, which is why I'm looking into the area. I will look at the Munhall-Homestead area and see what kind of deals are around there. Thanks again for your input!

    0Reply
  • Tyler Mau
    OP
    Santa Clara, CA · Member since 2018 · 14 posts · 6 votes
    8y

    Hi Phil,

    Thank you for the great information! I'll take this into consideration as I narrow down my search locations. Looks like I will have to be sure to budget in a good amount of rehab costs.

    0Reply
  • Chris Pasternak
    Real Estate Broker · Pueblo, CO · Member since 2013 · 366 posts · 303 votes
    8y

    I'm floored that someone mentioned Homestead.  That tugs at my heart a little bit.  The great thing about the Homestead renaissance is that it's comprised of mostly local guys and gals instead of "big money" hearing Google and tech and throwing money at it.  It's growing slowly and steadily.  Some would say very very slow.  A lot of investors won't touch it because it's reputation has not been stellar since the mill shut down.  Fine with me.  It seemed like it was going to turn around in a major way with the waterfront and that fell by the wayside for many years until locals started renovating the avenues business district and turning nothing into something.  The more savvy investor takes a harder look at the place and says the buildings are too old, beat up and drained of all possible revenue by investors before them.  And in my opinion, the savviest investor looks at Homestead and says why not.  Why not renovate that old decrepid junker and sell it to a homebuyer that can't afford a Lawrenceville townhome with no yard, no parking and a pricetag beyond anyone's wildest imagination.  For what?  A revitalized business district?  Easy access to the city?  Hmmm.  But hey I'm just over here sipping my tea spattering on about some old mill town without a shot in heck of going anywhere.

    2Reply
  • Jeremy Lee
    Rental Property Investor · Pittsburgh, PA · Member since 2017 · 41 posts · 20 votes
    8y

    @Tyler Mau

    Welcome to BP. I think Phil hit the nail right on the head - there are just too many niche areas in Pittsburgh to categorize neighborhoods into broad categories. I'd just like to note that with the exception of extreme cases, investors can make it work in any neighborhood and still 'cash flow' for the most part. It comes down to your level of comfort and expert knowledge knowing a specific area. Pittsburgh is an ever growing, ever evolving market - its hard enough to understand the area if you live here, probably harder as a remote investor. 

    DM me if you are interested in PM recommendations. I know a couple I'd consider using and a bunch more I'd never go near. 

    Best

    Jeremy

    0Reply
  • Jim K.
    Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes
    8y

    @Chris Pasternak

    http://www.wtae.com/article/one-person-hurt-in-rep...

    A woman got shot in the leg just outside St. Gregory, the church I got married at, and then the next day someone just executed this poor guy right off Frick Park, what, four blocks down the hill from there? No leads, no suspects, no one saw anything, no one knows anything.

    0Reply
  • Alex Deacon
    Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
    8y

    @Jim K. @Chris Pasternak Homestead is spotty still. When the waterfront went in there was a buzz about the area. It never happened. Now there is the tech buzz and still things creep along very slowly. I think its a good area to invest but you have to be careful and know what you are getting into. I have about 6 units in that area and we manage a bunch more. If you buy low enough then even if the area take a long time to come around you can still cash flow. Now may be the time to speculate and buy there since the prices are reasonable but its all speculation at this point.

    1Reply
  • Chris Pasternak
    Real Estate Broker · Pueblo, CO · Member since 2013 · 366 posts · 303 votes
    8y

    @Jim K., when is the motive ever exceptionally clear?

    @Alex Deacon, yes its street by street for sure.  There are areas I would not buy and areas I definitely would buy in a heartbeat.  With the revival of the avenues and some investors flipping and others renovating and pulling in good rents its a positive note that's not been seen there ever.  It's a dark horse and I'm playing the long game.

    1Reply
  • Chris Williams
    Spokane, WA · Member since 2016 · 103 posts · 76 votes
    8y

    A friend of mine recently moved from the SF Bay Area to a smaller town just north of Pittsburgh. Sold a house in Tracy and was able to pay for the Pittsburgh house (which sits on 2 acres) outright, with plenty left over. He loves it there.

    It's a region I consider for investing. Glad to find out about at least one good area.

    0Reply
  • Account Closed
    Pittsburgh, PA · Member since 2017 · 14 posts · 10 votes
    8y

    Invest in the B neighborhoods. 

    There are a number of large-scale apartment complexes going up in the area. And then on the flip side, there are smaller underdeveloped neighborhoods who will always be "renters areas." In response to this economic polarization, the market will be in desperate need of properties in the middle. The ones that will provide people with the opportunity to rent $800-1600 for a place to live. 

    1Reply
  • Bob Baca
    Pittsburgh, PA · Member since 2018 · 1 post · 0 votes
    8y

    I work for a property management company, with buildings all over Pittsburgh. The Shadyside area, as said above, is already "up". Mostly older buildings, but if you have the capital, anything near the schools will keep the money coming in. Students will often room together, to make a $1600/mo, 2 BR unit more affordable. Very low vacancy rates, but high turnover. Nearby Google (Bakery Square), and the surrounding area has had an unbelievable amount of new construction. I can't even begin to imagine the money invested.

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