Townhome Investment/Rent Rate
New to Real Estate but there is a Townhome for Sale at $165,000 about 45 minutes outside the Pittsburgh Area. It is a 2 bedroom 1.5 bath with an garage. Does not need any work done to it. Looking to rent the property after purchase. Does this price seem adequate for the market? What are the monthly rents for something like this? Any help would be appreciated.
Most Popular Reply
@Tyler George - a few things to help you evaluate this deal:
First, to answer your questions properly, you'll want to research:
1. Comparable sales - Pull sold townhomes in the same area (same bed/bath, similar sqft) from the last 6 months on Redfin or Zillow. That'll tell you if $165k is market rate or a discount.
2. Rent comps - Check Rentometer, Zillow rentals, or Craigslist for similar townhomes in that area. A 2/1.5 with garage 45 min outside Pittsburgh might rent in the $1,000-1,400/month range depending on the specific town, but you need local data.
3. Run the numbers - Once you have the rent estimate, factor in:
- PITI (principal, interest, taxes, insurance)
- HOA fees (townhomes often have these - make sure to ask)
- Vacancy (budget 5-8%)
- Maintenance/repairs (5-10%)
- Cap-ex reserves (5-8%)
For quick deal analysis, I use a few tools: Rentometer for rent comps, the BP calculator for running numbers, and PropLab for pulling comps and estimating ARV quickly. DealCheck is another solid option. The key is verifying the numbers before making an offer.
General rule of thumb: At $165k, you'd want $1,650/month rent to hit the 1% rule (a quick filter, not a guarantee of cash flow). That's aggressive for a Pittsburgh suburb townhome - most I've seen are closer to 0.6-0.8%.
What town specifically? That'll help narrow down what you can actually charge. Also - is there an HOA? That can eat into cash flow significantly on townhomes.