New to Real Estate · Pittsburgh · Member since 2020 · 16 posts · 3 votes
Hello!
I am curious about a temperature check on Mt. Oliver Pittsburgh! I see on the forum 4-5 years ago not many people seemed to think it was a great investment area but it definitely has improved a little since then. Anyone have some opinions on buying a rental in this market?
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
5y
@Nico Savoia we manage 700 units in the Pittsburgh market and quite a few in Mount Oliver. The borough is hard to deal with, the taxes are high, the property values are not increasing in value in any significance. The neighborhood in general is a c minus. Does that help.
Rental Property Investor · Pittsburgh, PA · Member since 2019 · 530 posts · 511 votes
5y
Disclaimer: I don’t own there.
I have moved a couple <$10k wholesale deals there in the last year or so. We currently don’t advertise there as we still view it negatively. I swear I saw people dealing across the street from the precinct building when I drove by 2 months ago. I would take that as a bit of a risk indicator. I also have seen a couple places our group flipped 12-14 years ago selling for the same price as then in the last two years, so even inflation doesn’t appear to have increased value much. Overall I am not overly hot on it myself, and I would want to use a property manager versus manage myself if I bought there.
Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
5y
@Nico Savoia
Are you local or out of state. I think it can work if you manage it yourself and do a great job screening, maybe do section 8, etc.
However I wouldn't trust a property manager to manage effectively in this area personally unless it was on one of the better streets and a well maintained building.
Every area has good tenants, you just need to manage your investment properly to find them, however mt Oliver has a lot of metrics regarding crime, income, lowly ranked schools, etc. that make it a very management intensive area.
I wouldn't buy or manage there unless you had some experience managing in similar areas or are willing to gain the hard experience of doing so. If you do that then investing in these kinds of areas can be very lucrative cash flow wise. However the values don't go up and Mt Oliver doesn't have anything going for it that would make me think appreciation is imminent. So youre going to miss out on all the long term benefits of RE investing.
Additionally major repairs cost the same if your rental is $500 or $1200. So when you need to replace the roof which one would you rather have?
"Additionally major repairs cost the same if your rental is $500 or $1200. So when you need to replace the roof which one would you rather have?"
If my monthly costs on the former were $200 and $1100 on the later, I would rather have the former every day of the week! :-)
Well of course, but a $1200 a month SFH won't cost $1100 a month in fixed costs. We are talking like a Beechview SFH at maybe $120k. Which would probably cost around $650 a month in non variable expenses (basically PITI on a 30 year note). Call it $800 if you have to do a commercial loan. But then you're not buying that deal.
Thats not a great deal, but I'd rather have that then a $750 a month rental in Mt Oliver that cost me $50k. Fixed monthly costs on that would be somewhere in the avenue of $400 a month.
But then as soon as you actually save appropriately for capex, management costs, vacancy, etc. You're probably negative on that cheaper one or close to break even. A house in Pittsburgh costs MINIMUM $200 per month in capex plus repairs. And often ends up being a little more.
So even the bad deal in a better higher rent area ends up being better than an average deal in a lesser area.
If you can pick up these houses in areas like Mt Oliver for 10-30k that don't need much work that's a different story. But that's not the norm. If you're buying things in reasonable condition at reasonable prices then the better, higher rent areas are generally the better bet for a number of reasons.
I own in Mount Oliver and manage my own property I would only recommend it if you plan on going section 8 and find a fantastic deal. Mount Oliver is Allegheny county housing not city of Pittsburgh section 8 so rents are a little lower and like what was stated your not getting high returns on property value so if you can find something that is already rent ready and under $50k or only needs paint and carpet maybe if it’s a big renovation then I would stay away.
Investor · Pittsburgh, PA · Member since 2015 · 1k+ posts · 1k+ votes
5y
@Nico Savoia we manage 700 units in the Pittsburgh market and quite a few in Mount Oliver. The borough is hard to deal with, the taxes are high, the property values are not increasing in value in any significance. The neighborhood in general is a c minus. Does that help.